Pune International Airport Site: AAI demands more land; focus shifts from Khed to Purandar
With more land sought by the Airports Authority of India (AAI) for the proposed Pune international airport, the district administration along with the officials from the AAI and Maharashtra Airport Development Company (MADC) have shown keen interest on the site in Purandar taluka, besides having assessed two sites of Koye-Pait and other villages in Khed taluka on Friday. The AAI, after the review, is expected to prepare their report within two weeks with Chief Minister Devendra Fadnavis asking them to speed up the process. Earlier, the AAI had put forth the proposal of 1,200 hectare but on Friday, the officials demanded 1,800-2,000 hectare, which came as point of concern for the district administration officials. The earlier two sites in Khed taluka is spread over 1,400-1,500 hectare while the villages Rajewadi and Waghapur in Purandar have the desired land as put forth by the AAI. The officials of AAI and MADC had reviewed the sites on Friday. According to MADC officials, the day-long review had the team from AAI examining all the options and the final report is expected within two weeks. Principal Secretary, civil aviation, Sham Lal Goyal, officials from AAI JK Dutta and S Dey were part of the team along with Vishwas Patil, MADC MD and Pune Collector Saurabh Rao. The existing two sites in Khed taluka at Rajgurunagar, which included the villages Gargotwadi and Koye Pait stretch, were shown to the team while they also conducted a recce on Purandar-Waghapur, Rajewadi and Dalimb in Daund area. While no site has been ruled out, the availability of land in these areas seems to make Purandar a viable option. The distance of these sites from the city is nearly 50 km. Pune district administration, led by the Pune Collector Saurabh Rao, said that the AAI put forth the fresh demand for 1,800-2,000 hectare of land on Friday for the first time. “We have shown them three sites and whichever is feasible and suits the requirement will be given a go-ahead by the AAI team. While the Khed site is slightly undulating and hilly which may escalate the cost of the project, the Purandar site is barren and plain,” said the collector. Moreover, the earlier demand of the runway was 6 km by 2 km and on Friday it was stated that they would require 6 km by 4 km by the AAI officials, which would mean more than 2,000 hectare of land would be required and that would mean more displacement and rehabilitation. Anthony Zettel Womens Jersey
Air India Express turns profitable for the first time
Air India is likely to enjoy acche din, as its low-cost international subsidiary Air India Express has turned the corner by reporting net profits for the first time since it started operations in April 2005. The airline reported a profit of Rs 362 crore during the 2015-16 fiscal, helped by lower fuel prices and improved revenues over the past year on the back of flying more people per flight. The airline had incurred losses of Rs 62 crore during the 2014-15 fiscal. Profits of AI express has come during the fiscal, when its parent Air India is also expected to make operational profit. The airline also found a mention in Prime Minister Narendra Modi’s Independence Day speech, where he complimented the national carrier for improved financial performance. The airline’s board approved the audited financial results on Wednesday. K Shyam Sundar, chief executive officer of Air India Charters Ltd, the subsidiary that operates Air India Express, told ET that the turnaround could be achieved on the back of improved operations. Bobby Hull Jersey
Mahindra May Start Plane Sales, Manufacturing in India This Year
The aerospace unit of Mahindra & Mahindra Ltd plans to sell planes built by its Australian unit in India this year, a top company executive said. Mahindra may also consider manufacturing the planes in India if sales pick up. “We are hoping that (regulatory) approvals will come this year; so once approvals come this year, we will start selling the planes in India,” said S.P. Shukla, chairman, Mahindra Aerospace Pvt. Ltd, part of the $17.8-billion Mahindra Group, at an aerospace summit on Wednesday. In 2008, Mahindra bought Australia’s GippsAero, which makes the eight-seater GA8 Airvan close to Melbourne. About 220 of these planes are flying in 30 countries. Shukla explained why the plane continues to be made in Melbourne. “In Australia, there was a standard of CASA (Australian aviation regulator); CASA has a reciprocal arrangement with FAA (US aviation regulator) in the US, which has a reciprocal arrangement with Europe. And therefore, it makes sense if you have approvals in Australia to continue assembling in Australia,” he said. The next step could be to make in India. “After we start selling the plane in India, we will definitely look at the possibility of making also,” he said, adding some parts of the plane were already made in Bengaluru and supplied to the Melbourne facility. Aircraft certifications are tough to get and without them, it’s difficult to find buyers. Julian Edelman Authentic Jersey
Moody’s downgrades credit rating of DIAL
Moody’s Investors Service today cut the credit rating of DIAL, which operates the international airport here, citing concerns over “cash flow generation” level. DIAL’s (Delhi International Airport Pvt Ltd) corporate family rating as well as senior secured ratings have been revised downwards to ‘Ba2’ from ‘Ba1’ while the outlook is stable. ‘Ba’ indicates substantial credit risk. Cash flow squeeze Moody’s vice-president and senior analyst Abhishek Tyagi said, “The downgrade reflects continued concerns about the level of cash flow generation.” This follows regulator AERA’s previous tariff order, “which will see regulated revenues reduced materially over the 2015-19 regulatory period to levels that were not incorporated in our previous expectation,” he said in a release. The rating downgrade has also taken into account DIAL’s new expansion programme that is planned over the next 3–5 years, which according to Moody’s will “further pressure financial metrics.” Announced in December last year, the tariff order by the Airports Economic Regulatory Authority (AERA) will be applicable on DIAL over 2016–19. It will lead to a substantial decrease in annual aeronautical revenue by around ?2,000 crore, or about 70 per cent, from 2018 fiscal year, Tyagi noted. “This will also alter the revenue mix, with the proportion of higher risk non-aeronautical revenues increasing to a higher level than previously anticipated,” he added. The Airports Economic Regulatory Authority Appellate Tribunal (AERAAT) is reviewing the previous tariff order (covering the period 2010 to 2014). Adequate liquidity Moody’s said the stable outlook reflects DIAL’s adequate liquidity. Upward rating movement is unlikely in the near term, given the planned expansion programme and the uncertainty associated with the regulatory process, it added. DIAL is a three-way joint venture between GMR group, which is the majority stakeholder, the state-owned Airports Authority of India (AAI) and Germany’s Fraport Mike Adams Jersey
GMR subsidiary will pay 36.9% of topline for 38 years to operate new airport in North Goa
GMR Airport Ltd will pay 36.9 per cent of the topline during the concession period for managing the greenfield airport in Mopa, Goa. During a call with analysts late on Monday, senior GMR officials said that though the concession period is for 40 years, the pay-out will for 38 years as there is a two-year moratorium on the payment. GMR Airport Ltd, a subsidiary of GMR Infrastructure Ltd, won the international competitive bid for the development and operation of Mopa airport in North Goa late last Sunday. BOT mode The airport is to be built through Build Operate Transfer (BOT) initially for a period of 40 years after which it will be thrown open for bidding. The winner of the bid will get to run the airport for another 20 years. At that time, The Right of First Refusal will be with the GMR Group which will be allowed to match the bid for the airport in case it is not the winner in that round. Mopa airport is likely to become operational in late 2020 or early 2021 and will have a capacity to handle 7 million passengers. The existing airport at Dabolim and the one in Mopa will operate simultaneously and compete with each other for traffic. Operational hours “The new airport will be operational for 24 hours and unlike the existing airport where there are restrictions on the hours that it can be used by commercial airlines this problem will not exist in Mopa. Passengers will get a better airport experience,” a senior official said. Mopa is 35 km from Panjim while the existing airport is about 20 km. At the existing airport no flights are allowed between 8 a.m. and 1 p.m. Last year there was a demand for 12 charters from an international company but due to restrictions at the existing airport only five could be operated. The GMR Group already operates and controls the airports in Delhi and Hyderabad as also Cebu airport in the Philippines. Capex plans For the first phase of the project, a capex of ?1,500-1,800 crore is expected and this will be funded through a mix of debt and equity in the ratio of 70:30. While the design of Mopa airport is yet to be finalised, it is being planned as a tourist destination on the lines of Koh Samuai airport in Thailand where the sea and its cool breeze welcome passengers. Nate Hairston Authentic Jersey
Karnataka tweaks Aerospace Policy
Karnataka Cabinet has approved amendments to the Karnataka Aerospace Policy 2013-23 to make the state a favourable destination for maintenance, repair and overhaul (MRO) investments. Briefing reporters after the Cabinet meet, State Law and Parliamentary Affairs Minister TB Jayachandra said, “The amendment pertains to providing special incentives for the development of the MRO sector to complement the incentives provided in the Civil Aviation Policy and also provide incentives for the first two MROs in the state on case-to-case basis.” The policy also offers incentives for an exclusive defence park. A fully integrated defence and aerospace infrastructure facility is also planned in Bengaluru. “This is being planned in view of the Centre opening up the defence production sector through exclusive defence parks. The state plans to tap huge investments in the sector,” he said. For the development of MRO centres in the state, the state government had earlier planned the cluster approach, making Bengaluru the hub. In the amended policy, the state government is planning south cluster (Bengaluru, Mysuru, Managaluru and Tumkuru). Tumkuru hub Tumkuru is an emerging hub where HAL is building its helicopter plant at Gubbi. Bangalore Aerospace Park at Devanahalli and MRO centres at BIAL and Mysore, and a defence manufacturing cluster at Managaluru are also being planned. The amendments have been made in view of the 33 project proposals received at ‘Invest Karnataka’ meet held early this year. The proposals are to the tune of ?14,520 crore with the potential to generate over 10,000 jobs. Jayachandra said state government is determined to demolish all buildings, including massive malls and apartment blocks, built on major storm water drains in Bengaluru. It also includes massive apartment block built by Prestige Developers in Bellandur area. The demolition drive by the BBMP to clear encroachments on storm water drains during recent rains had come under criticism as people alleged that while homes of the poor were being demolished, large buildings belonging to the rich and influential builders were spared. “We will demolish all buildings illegally built on such drains, be it a massive apartment blocks, malls or an ordinary house,” he said. Borje Salming Jersey
Regional connectivity: AIR India, SpiceJet make the cut; bigger jets don’t
The first set of regional flights may come from Air India and SpiceJet, as the aviation ministry feels these two already have suitable aircraft in their fleet to be the launch airlines for its project to provide air connectivity to towns and small cities. “Bigger jets will not be able to fly these regional routes, but airlines with smaller aircraft can … If Air India increases utilisation of its smaller aircraft, they can surely fly these routes. SpiceJet has also made inquiries about the scheme. Both these airlines will get exclusive rights on that particular route for a period of three years,” aviation minister Ashok Gajapati Raju told ET, when asked about the participation by these carriers. While Alliance Air, the regional subsidiary of Air India, operates a fleet of 70-seat ATRs, SpiceJet has similar-sized Bombardier Q400 aircraft. A need for support from these airlines was felt after the government realised that it would be difficult for any new carrier to lease aircraft due to problems with airlines in India. “Leasing costs for Indian carriers were pushed up due to the Kingfisher Airlines issue (the airline went bust and it took months for lessors to take back aircraft).So, we need to provide a comfort level to these lessors in terms of allowing them to deregister aircraft (and reposes them) when the payments are not coming. They cannot be held at ransom,” said Raju. Analysts, though, don’t agree with the plan to use 70-seat aircraft to make the scheme a success. “Regional connectivity can only be successful with 15 or 20-seater aircraft and it does not make sense for a 70-seater aircraft to be used for regional connectivity ,” said Mark Martin, founder and CEO of Martin Consulting, an aviation consultancy firm. Ryan Miller Jersey
Aviation Ministry may adopt Railways’ model to beat higher fares during festival rush
The aviation ministry is discussing a railways-kind of model to provide relief to flyers from higher fares during festival season and long weekends and is considering allowing airlines to add more capacity for such short periods to bridge the demand-capacity mismatch. “The fares do get high during seasons like Christmas coming and all. For those times, we do not have capacity (aircraft) lying idle that can be used when the demand spikes. The solution could be to bring in more capacity for a brief period to tide over the fare hike. We can ask airlines that we will allow them to bring in aircraft lease for a brief period of time,” Aviation Minister Ashok Gajapathi Raju told ET. The model will be on the lines of Indian Railways, which launches special trains during the festive seasons to accommodate the huge increase in number of people who travel to celebrate these festivals. While the average airfares are lower, they spike during extended weekends and around the festival season, which is traditionally October to December in India. Raju was quick to add that ‘nothing is firmed up now but this could be a solution.’ “It’s a complicated problem and we do not have simplistic answers. If you find a simplistic answer, you will be adding to the problems.” Analysts believe that the idea is logical but the implementation could be tricky. “It’s a great idea and will surely help control the fare surge during such days of the year. I would assume that airlines would also like the idea of bringing in more capacity and getting maximum business during the surge. But the bigger question is the feasibility of such an idea. It will not be easy to ensure that extra capacity in the country gets slots at airports and also excess manpower to make it happen,” said Sharat Dhall, president at Yatra.com, India’s second largest online travel agency. One said wet lease of aircraft as a stop gap arrangement is not a model that is followed anywhere in the world. “How can you control fares by wet leasing aircraft, which itself costs three times higher than dry lease. Wet lease, as it is, is a model for country that does not have enough pilots and crew, which is not the case with us. The government should try to ensure that fuel prices are brought down, as cost of fuel is the largest component on any airline’s balance sheet,” said Mark Martin, CEO at Martin Consulting, an aviation consultancy firm. Raju also said that the competition helps in keeping the fares low. “Competition has ensured it (fares) to come down. What is our problem? Our problem is when the competition is minimal,” he further added. His assertion was seconded by an analysis of fares in the highest band offered by airlines by the Directorate General of Civil Aviation. The analysis shows that airline sell their highest fare band tickets in sectors like Delhi-Leh, Delhi-Dehradun and Chennai-Port Blair — all routes have lesser number of flights, leading to a demand-supply mismatch. Brian Dawkins Womens Jersey
As Indian economy soars, business class flight bookings see a sharp rise
More wealthy Indians are buying business class seats on international flights, primarily as corporates expand their business interests globally and spend on premium air travel for their senior management. A year-on-year comparison done for every month since January by some travel firms for ET revealed bookings in the segment jumped by up to 75 per cent. The growth in popularity in the front end of the cabin is testimony to India’s economic growth — the fastest among major economies — and increased corporate activity that has directly led to a spurt in corporate travel. “The number of people who travel business class has gone up and this is a reflection of business confidence in the corporate sector,” said John Nair, head of business travel at Cox & Kings. “As a result, companies are more flexible and have permitted more senior management to travel business class. Second, in the past couple of years, the capacity from India has not gone up but the number of people who travel in the premium cabin has and, therefore, there is a supply-demand mismatch,” he added. Nair of Cox & Kings said the mid- and long-haul sectors with travel times of five to nine hours are the most popular for business class travel. India has an annual international air passenger traffic of about 55 million. About 60 domestic and foreign airlines ferry international flyers in and out of the country. Of India’s seven major local carriers, four fly international and only Jet Airways and Air India sell business class seats. Out of all international carriers operating in India, Jet has increased capacity at the fastest clip on overseas routes. Industry data showed that Indian passengers are opting more for foreign carriers that have a wider global air network than their Indian counterparts. Data compiled by MakeMyTrip, India’s biggest online travel portal, showed business class bookings on foreign carriers grew by 37 per cent to 88 per cent year-on-year every month from January to August. For example, bookings in August 2016 grew by 88 per cent over August 2015. For Indian carriers, they declined every month except in March and June. The portal compiled data on the basis of an average of spot and prior bookings. Manoj Samuel, executive director of Riya Travels, one of India’s biggest offline travel portals, said there has been an increase in bookings on carriers such as UAE’s Emirates and Etihad Airways, UK’s flag carrier British Airways and German airline Lufthansa, among others. Foreign carriers gain Data also showed that while foreign carriers have been enticing fliers by cutting fares on business class by up to 24 per cent, their Indian counterparts have increased fares by between 19 per cent and 59 per cent, something that may have led to a decline in demand for the latter. Indian carriers have also been facing slower growth rates on the business class segment in domestic flights, as corporates decide not to spend on premium fares on short distance air travel. Local flights in India take less than three hours. Jet Airways, Air India and Vistara sell business class seats on the domestic sector. That segment for carriers grew in the first three months of the year but fell in the subsequent months, data showed. “Actually, demand for sub-four hour flights is falling as people don’t see enough value. The growth is in longer flights,” said Manoj Chacko, chief executive officer at SOTC Business Travel. Fred VanVleet Jersey
UP polls in sight, Greater Noida airport gets central push
With the UP assembly elections approaching, the Modi administration has fast-tracked the groundwork for NCR’s second airport in Greater Noida’s Jewar district. The UP government is also pushing for early clearance of the airport apart from having international operations at Agra Airport. Aviation secretary R N Choubey told TOI on Thursday that the ministry had asked the state government to submit location maps for the proposed airport as the next step in the clearance process involved giving site approval.”Once that is given, the state will prepare the detailed project report. Then the aviation ministry will give in-principle approval following which the project will be executed,” he said. Execution means acquiring land and then bidding the project out. Choubey clarified that the airport’s construction won’t require amending the `150km rule’. According to this, an airport should not be built in vicinity of an existing one till the latter’s capacity falls short of meeting the requirements of its catchment area. “In Delhi’s case, the only condition is that the airport operator of the existing facility (GMR Group for IGI Airport) will have the right of first refusal (ROFR),” Choubey said, removing all fears over the 150km rule being a stumbling block for the NCR getting a second airport. Under ROFR, the GMR-backed Delhi International Airport Pvt Ltd (DIAL) can bid for any such airport and will get the right to match the highest bid if its own quotation is within 10% of the same. In fact, a Comptroller and Auditor General report in 2012 had criticised the ROFR given to DIAL. “This provision thwarts competition and provides DIAL with a natural advantage on the second airport,” it had said. However, the secretary said the rule was not a blanket one. “In Delhi, it means existing airport operator having ROFR. Under the concessiona ire agreement with operators in Bengaluru and Hyderabad, ROFR means another airport will not be allowed to operate there for 25 years.” In Mumbai, the need for another airport was triggered by the fact that the existing Chhatrapati Shivaji Airport was no longer able to meet the megapolis’ requirement. Delhi’s IGI Airport, on the other hand, still has the scope for a lot of expansion, including laying of the fourth runway , construction of a new terminal and expansion of the existing Terminal 1. Meanwhile, the UP government is pushing for international operations at Agra Airport, a defence airfield. “The UP chief secretary met me recently and we have okayed that. The defence ministry has also indicated its in-principle approval. It may happen soon,” Choubey said. The assembly elections are due early next year. Both announcements will have to be made before the Election Commission announces polling dates after which any such decision will be banned under the code of conduct. John Stallworth Jersey