After Jet’s recent plane order spree, India finds itself hard-pressed to find parking slots
At last week’s Farnborough Air Show, an Indian carrier placed a $7.7 billion order while an additional $72 billion of contracts are in the offing. The next challenge: Finding landing and parking slots for these planes. As air travel heats up in the world’s fastest-growing major aviation market, infrastructure has failed to keep pace with traffic growth fueled by rising incomes and affordable fares. The average time an aircraft spends circling before it can land in Mumbai during peak hours is about 45 minutes to an hour, versus 25 minutes for Singapore and zero for Qatar, according to Dubai-based Martin Consulting LLC. India plans to invest $5 billion to improve airport infrastructure, which is “inadequate” compared with China’s proposal for $130 billion in 15 years, a June research paper by KPMG and the Associated Chambers of Commerce of India said. A proposal for a new airport in the outskirts of Mumbai has languished on the drawing board since 1997 even as Boeing Co. estimates Indian carriers need 1,740 aircraft over the next two decades. Huge Issue “We need to move fast,” Sanjiv Kapoor, chief commercial officer of Vistara, a local unit of Singapore Airlines Ltd., said in an interview. “That’s a huge issue. You cannot have a commercial capital and a political capital that do not have slots available for growth,” he said, referring to Mumbai and New Delhi. Out of the nation’s 450 airstrips and airports, only 75 handle commercial airlines, with the rest remaining idle or rarely used because of weak demand, according to the government. The lack of facilities may force carriers to defer deliveries, hurting planemakers including Boeing and Airbus Group SE. Scores of airlines struggle to manage as many as 2,000 flights a day, and none of the Indian carriers, barring AirAsia Bhd.’s local unit, could touch the 90 percent on-time performance, a key for low-cost models, data from the Directorate General of Civil Aviation show. The air-travel market in Asia’s third-biggest economy grew 20 percent in 2015, compared with about 10 percent in China and less than 5 percent in the U.S., according to the International Air Transport Association. Last week, AirAsia group Chief Executive Officer Tony Fernandes said he was “very, very bullish” on India. The potential for further growth is spurring operators to scale up their fleets. At least 709 planes are on order for the next few years. Go Airlines India Pvt. said it will buy 72 A320neos from Airbus at Farnborough last week. SpiceJet Ltd. is in talks for 150 aircraft and IndiGo, the nation’s top budget carrier, has ordered 430 Airbus narrow-body jets on top of the 108 it already flies. The problem is not just limited to India. There has often been a gap between intention and infrastructure delivery for Asian airport, according to a 2015 research paper by OAG Aviation Worldwide. “Infrastructure has to catch up as dynamics of aviation have changed,” said Mark D. Martin, founder Martin Consulting. “Countries must make sure that airports are built not just for bigger jets, but also for smaller, 5-10 seater planes to connect its people.” It isn’t the case that India hasn’t done much in the past 10 years. It spent $2.7 billion to upgrade the airport in New Delhi and added a new terminal in 2010, while it plowed $885 million to modernize the Mumbai airport in 2014. Though the facilities in New Delhi and Mumbai were named the world’s No. 1 in the 25-40 million passengers-a-year segment by the Airport Council International for 2015, the nation’s busiest airports don’t even figure in the top 20 globally by traffic. As much as $40 billion in investment is needed in the next 15 years to improve India’s airport infrastructure, according to estimates by Sydney-based CAPA Centre for Aviation. In an effort to attract capital, Prime Minister Narendra Modi in June eased norms for foreigners, who can now fully own existing airports without government approvals. To make the airports more attractive, Modi is promising tax incentives for companies providing maintenance, repair and overhaul services. The government estimates Indian carriers alone generate MRO business worth 50 billion rupees ($745 million) annually, and most of that is spent in countries like Sri Lanka, Singapore and Malaysia as India lacks MRO facilities. Modi is also seeking to revive many of the idle airports to enhance regional connectivity. Weak demand have made many of them unviable for commercial single-aisle jets. His government last month said it would compensate for losses if states cut taxes on jet fuel and offer free parking and landing, in a step that may encourage carriers to fly to the so-called “ghost” airports. “Ghost airports are ghosts for a reason — not enough business potential currently,” Vistara’s Kapoor said in a Twitter post on July 12, “Yet hundreds of A320s on order. Where will they all fly, am really curious!” Russ Grimm Jersey
Hard to do business in India, but will remain here: AirAsia CEO
AirAsia group chief Tony Fernandes has said it was hard to do business in India due to protectionist policies and “vested interests”, but his joint venture carrier AirAsia India was here for a long haul. Defending the slow-paced growth of AirAsia India, he said the aviation sector here was a “double marathon” and not a “sprint”. “I am not going to storm in like a bull in China shop like Vijay Mallya did, and get caught. Now we have a (civil aviation) policy and the the policy is very clear on what we have to do. So talk to us in a few years time,” he told PTI when asked about the growth plans for his airlines. Observing that the BJP-led government has “at least delivered 80 per cent of what it talked about” in the draft aviation policy, the AirAsia chief said “it is hard (to do business) in India (as) there are so many vested interest who were trying to keep some of the incumbents happy.” “So at least they changed it (norm for international flying by domestic carriers) and we are clear what we need to do. And I would not be dead by the time 5 years come along with 20 aircraft we had before,” the AirAsia (Berhad) Group Chief Executive Officer told PTI on the sidelines of the Farnborough International Airshow in the UK last week. Ryan Jensen Jersey
Defence department agrees to give land for runway expansion
One more hurdle in the way of the runway expansion at the Trichy airport was cleared as the ministry of defence gave an in-principle nod to accept alternative land in exchange for the land which will be handed over to the Airport Authority of India (AAI) for the expansion works. According to P Kumar MP, who chaired the Airport Advisory Committee meeting held at the Trichy international airport here on Saturday, out of the 510 acres of land needed for the runway expansion, 165 acres was attached with the defence department. “As per norms, airport authorities have identified the alternative land to be handed over. Since authorities from the defence in principle accepted to hand over the land for expansion purpose, a major obstacle has been cleared,” he said. Regarding the remaining 345 acres, which comprises purambokku, wet and dry lands, the file is said to be with the transport secretary. “Once the file is signed by the respective authorities, the district revenue officials would expedite the process for acquiring the remaining lands. This would pave way for the expansion of runway from the existing area of 8,000 sqft to 12,000 sqft,” airport authorities said. Jason Spezza Jersey
Provide info on flights at IGI Airport: NGT to Aviation Ministry
The National Green Tribunal has directed the Ministry of Civil Aviation and aviation regulator DGCA to provide data on domestic and international flights at IGI Airport with details of their departure and arrivals. A Bench headed by NGT Chairperson Justice Swatanter Kumar also directed the government to file note on the mitigating steps taken by it to notify noise-level standards for airport noise zones within two weeks. “Statement be filed in relation to the extent of domestic and international flights with the details of departure and arrivals… “Statement shall also consist of measurement of noise level at the recipient end. In other areas, the decibel level be shown at the time of taking off and landing of aircraft, for both, day and night. What is their noise level in the residential area during the day and night times? It must state as to what are the contributing factors of noise in the surrounding area of the airport,” the bench said. The matter is now listed for hearing on August 22. Ryan Callahan Authentic Jersey
India to develop Palaly as regional airport
India is carrying out a feasibility study on the Palaly airport to assess its suitability to be utilised as a regional airport. This airport is now a Sri Lanka Air Force (SLAF)-run facility and is used for military and civilian flights in Sri Lanka. The Airport Authority of India (AAI) is now carrying out a feasibility study on the Palaly airport to see how it could be developed, Civil Aviation Authority (CAA) Director General H.M.C. Nimalsiri told the Sunday Times. About four months ago, an AAI team visited Palali to ascertain how the airport could be developed as a regional airport, he said. India has already supported the development of the Palaly airport, providing financial assistance for the reconstruction of about 1,000 metres of the existing 2,300-metre runway.This was done in 2010 on an agreement between the former Mahinda Rajapaksa government and India. Vontaze Burfict Womens Jersey
Regional airlines may get cheaper loans
The government is exploring ways to assist regional airlines in raising loans at cheaper interest rates to import aircraft as a part of the regional connectivity scheme. The civil aviation ministry held a meeting with non-scheduled airlines in which concerns related to the regional connectivity scheme were raised by the operators. “We feel the non-scheduled operators are the most prospective players who will come immediately to become a part of our scheme. Their response in the meeting was encouraging but they had certain concerns which we aim to address,” said a senior civil aviation ministry official. The official said that the present procedure of leasing aircraft becomes tedious for airlines and ministry is looking forward to resolving this. Under the current norms, an aircraft cannot be mortgaged for raising loans to lease another aircraft. The official said it may propose to the Union finance ministry to allow financial institutions to give loans against aircraft mortgage. “We raised the issue related to raising capital and lowering interest rate for acquiring aircraft. There is a need for finance to be made available to us at a lower interest rate and financial institutions should come forward,” said Bhupesh Joshi, governing board member of Business Aircraft Operators Association. Adam Vinatieri Jersey
From next month, airlines to pay huge compensation for cancellation or denying boarding to flier
Cancelling a flight or denying boarding to a flier is going to cost heavily to domestic airlines as the new guidelines by the aviation regulator DGCA provides for massive compensation in such cases. As per the revised compensation norms, which are effective from August 1, an airline will have to pay up to Rs 10,000 to a flier in the case of cancelling/delaying a flight beyond two hours, while the compensation for not allowing a passenger to board the flight stands at up to Rs 20,000. As of now airlines offer a meagre amount of up to Rs 4,000 for both denied boarding and cancelling a flight. Mack Hollins Jersey
Leaving on a private jet plane
It’s the ultimate symbol of a successful life — travelling in your own private jet. Besides the flexibility it offers with regards to time, travelling in a business jet also comes with the luxury of flying to destinations otherwise unconnected by regular airlines. So it’s not surprising that everyone is keen to use them — top executives, film stars, sportspersons, celebrities. In India, the list is growing. Bhupesh Joshi, Director and Chief Executive Officer of Club One Air, says his company has signed up first generation entrepreneurs, new IT czars, real-estate tycoons and jewellery houses as clients for his business jets. And Club One Air is just one of the many business jet operators in the country. Estimates suggest that there are over 100 business jets and 150 helicopters operating in India. Jayant Nadkarni, President, Business Aircraft Operators Association (BAOA), best explains the difference between flying in regular airline and in a business jet: “Say that if an airline has an Airbus 320 or Boeing 737 aircraft, which is (akin) to a bus, imagine that business aviation is a taxi or a car (where) you hire the entire aircraft or you to fly in it on your own. A bus has select times but a taxi gives you complete flexibility.” BAOA was formed in March 2011 and it now has 81 members. Joshi of Club One Air says business jets offer the best choice of destinations. His company operates to almost 100 airports, while scheduled airlines link only 47 airports. “Earlier this segment was catering to luxury or personal requirements. But that is not the case any longer. Now we are flying to remote areas as there is no connectivity,” says Joshi. He points out that new industrial townships coming up in Gujarat, Madhya Pradesh and Jharkhand see executives using business jets. “This is purely because there is no connectivity. This growth is actually now supporting the need of the industry.” Deshazor Everett Authentic Jersey
GoAir’s fleet expansion to meet rising competition, say aviation experts
GoAir’s order for additional 72 Airbus A320neo planes signifies the airline’s confidence in India’s aviation growth and its intent to remain relevant in the crowded domestic skies, say sector experts. On Tuesday, GoAir signed up for 72 A320neo, doubling its order to 144 planes. All the planes will be delivered between 2016 and 2025. Over the last ten years, GoAir has followed a cautious approach of not chasing market share through rapid expansion or acquisition. In the last ten years, it grew its fleet size to 20 aircraft, inducting on an average two aircraft a year. Its small size also ensured that it did not burn cash the way some of its peers did and allowed it to remain profitable. Tuesday’s order announcement demonstrates its long-term commitment for growth. “Effectively, GoAir has a fleet strategy for the next ten years. It signifies management confidence in India’s aviation growth. In the face of existing and new competition, GoAir has to scale up and the order reflects the airline’s growth intent,” said Devesh Agarwal, editor of aviation blog Bangalore Aviation. Daniel Sorensen Jersey
Is There Any Point In Trying To Revive Air India Prior To Sell-Off?
The government wants to dress up the bride before giving it away in marriage. The bride in question is Air India and ‘dressing up’ refers to the revival of the ailing airline before it is reportedly put on the block for disinvestment. According to reports, one of the recommendations of the Niti Aayog—which has been tasked with drawing up a list of public sector undertakings (PSUs) for disinvestment—is to revive Air India before any disinvestment. The Aayog has included Air India in a list of 22 PSUs where revival will have to happen before any value can be realised through disinvestment. The only problem is Air India is past its sell-by date as far as revival is concerned. Don’t get taken in by the airline declaring a modest eight crore operational profit in 2015-16, even though this is the first time in a decade that the airline has used the word ‘profit’. Even assertions by the Chairman and Managing Director Ashwani Lohani of achieving an exponential increase in operational profits, to about Rs 800 crore in the current fiscal, are of no consequence. Reports suggest Lohani is eyeing the post of Chairman of the Railway Board, and lofty financial targets could well be left for his successor to achieve. Former Executive Director at the airline and the author of ‘Descent of Air India’ Jitender Bhargava says Air India was one of the first companies to be referred to the disinvestment commission in the 1980s. “30 years later, we are still talking about its revival. Isn’t past performance enough indication that revival is either difficult or not feasible at all with the current management structure and continuous political interference?” In his book, Bhargava identified three major events that led to Air India’s descent: the inability of the government to go in for disinvestment, the ill-advised aircraft acquisition programme and the merger of Indian Airlines and Air India. In the late 1990s, there was a proposal by the Tata group and Singapore Airlines to become strategic partners to provide professional management to Air India. But this fell through, allegedly because of vested interests. As for the aircraft acquisition programme, it cost an estimated Rs 40,000 crore and became the genesis of the airline’s eventual financial crisis. Air India still has about Rs 4,000 crore as annual debt repayment, largely because of this aircraft order. Now the government has promised Rs 30,000 crore equity support to Air India, of which over Rs 22,000 crore has been given till date. The airline is sticking to its turnaround plan under which this money was given. However, to understand why Air India’s revival is a mirage, one must read the fine print of its operational performance in 2015-16, when it was roundly argued that the airline has emerged from losses. First, it has only made an operational profit (that too, a mere eight crore in 2015-16), and there is no talk of net profit in the near future. Second, these figures are on the basis of unaudited results. Third, this modest operational profit came almost entirely from benign fuel prices and earnings from sale & leaseback activities. Not from a tight cost control or any marked improvement in other operational parameters. Niles Paul Womens Jersey