Aviation sector: Centre explores new model for development of airports
The government is considering a new model for development of airports wherein Airports Authority of India (AAI) retains the complete ownership of an airport but privatises most of the services, a senior civil aviation ministry official said. AAI currently owns and runs majority of the airports in the country. But the state-owned entity is a minority equity partner with private companies in Delhi and Mumbai international airports. “In our country, development of airports will be a mixture. Everything to be privatised will be a wrong thing, everything to be nationalised will also be a wrong thing. Public sector has a place, private sector has a place. Now there are other variations also which the government is thinking. Is it not possible for the Airports Authority of India to own a place and privatise services, and having a revenue share? We are working on such a model,” the official said. The National Civil Aviation Policy, 2016, unveiled last month had mentioned the possibility of the AAI giving out operations and maintenance for a cluster of existing or new airports. Out of 125 airports of AAI, about 95 are operational of which 71 have scheduled commercial operations. Delhi and Mumbai airports, which are majority owned by private companies GMR and GVK, respectively, and in which AAI is an equity partner, are currently a major source of revenues for the state-owned entity. AAI owns 26 per cent stake each in Delhi International Airport Ltd and Mumbai International Airport Ltd. The new development model being considered will ensure that the AAI remains the sole or majority owner of the airport to be modernised with most services being outsourced to private firms. The aviation ministry is planning to revive 50 non-operational airports of AAI in the next 3 years at an indicative cost of Rs 50-100 crore each. Sources said the new model may be tried at some of these 50 airports which are being revived. Chris Conley Jersey
AEAPL plans small airports,logistics centres in India
City-based Air Excellence Aviation Private Ltd (AEAPL) which has a tie-up with the cargo aircraft division of Russia’s United Aircraft Corporation is planning to set up small airports and air logistics centres across India. The company founded by Manish Kapoor intends to set up 100 Business Development Areas (BDAs) which will have small airports, and an equal number of air logistics centres (ALC) that comprise airstrips for cargo handling, in the country. “Our idea is to expand air connectivity to tier 2 and 3 cities on a large scale. We will rope in the state governments and private players to execute the projects,” Manish Kapoor, Chairman and Managing Director, AEAPL, told The Hans India. The company will own a majority stake of 51 per cent in 10 BDAs and an equal number of ALCs, while the remaining projects will be taken up with partners who are willing to invest the entire amount. According to him, each of the BDAs and ALCs require an investment of Rs 100 crore and will be able to generate at least 400 jobs. “The land requirement for each project is anywhere between 300 to 400 acres,” Kapoor said. Colorado Avalanche Jersey
Arunachal may lose civilian airport: ACS alleges
Arunachal Civil Society (ACS) Chairman Patey Tayum on Monday questioned the intention of Chief Minister Kalikho Pul endorsing Karsingsa for Green Field Airport (GFA). Chief Minister reportedly wrote a letter to the Union Minister of Civil Aviation Ashok Gajapathi Raju Pusapati. In a press conference held on Monday, ACS Chairman claimed that Chief Minister had written the letter in the wake of deadline served by Arun Kumar, Joint Secretary Ministry of Civil Aviation, Government of India wherein Kumar sought ‘standpoint’ of the state government on proposed GFA at Hollongi on May 23, 2016 and asked the government to respond within a month. However, the letter purportedly written by the CM does not have his signature or letterhead. Armed with document which he claimed was accessed from the department concern, Tayum stated that CM’s letter was confusing and detrimental to development in spite of knowledge about the deadline. Bilal Powell Womens Jersey
This is the one privilege that Air India has, but the cabinet might soon take it away
Until now, Air India, India’s flag carrier airline, had the privilege of being the only airline that carries government employees on official tours. However, the civil aviation ministry is preparing a cabinet note, asking for permission to allow it to opt for the airline offering cheapest fare. “The finance ministry, in one of the review meetings, has asked us to abolish this rule mandating Air India for official flights,” a senior aviation ministry official told ET on the condition of anonymity. “We are preparing a Cabinet note, which should reach the Cabinet for approval in 15 days,” he added. In the past, Air India has faced some wrath from some members of the government, which could also be the reason behind the ministry considering this change. Cabinet Minister M Venkaiah Naidu had taken to the social networking site Twitter when he missed a meeting because of delay in his Air India flight. However, as per analysts, the move is set to hurt the national carrier because when given a choice, government employees might not choose Air India. David Andrews Jersey
How is Rs 100/kg for excess baggage reasonable; Delhi High Court asks DGCA
Delhi High Court today asked aviation regulator DGCA how the figure of Rs 100 per kg for checked-in excess baggage between 15-20 kgs was reasonable as was contended by it. “You have not said what is the basis for the figure of Rs 100 per kg,” Justice Sanjeev Sachdeva asked. “How do you call it reasonable? Why not Rs 75 or Rs 150,” the judge asked after Additional Solicitor General (ASG) P S Patwalia, appearing for DGCA and the Ministry of Civil Aviation, said the Rs 100 figure was chosen as it was “reasonable”. ASG Patwalia, in response to the queries, also said the Director General of Civil Aviation (DGCA), as an expert body, was competent to arrive at the figure and if the airlines were aggrieved by it, they should have approached it. He also said that only four airlines had approached the court, all members of the Federation of Indian Airlines (FIA), against DGCA’s regulation which came into effect from July 1. As per the new regulation, airlines have been asked to charge Rs 100 per extra kg till 20 kg as against their current rates, ranging from Rs 220 to Rs 350. Currently, all domestic carriers allow free checked-in baggage up to 15 kgs. Only Air India allows free baggage up to 23 kg. During the arguments, the ASG said the different rates charged for excess checked-in baggage by the airlines was discriminatory and warranted interference by DGCA. The court, however, observed that discrimination would have to be seen vis-a-vis passengers and not airlines and asked what was the material considered by DGCA to come to the conclusion that there was discriminatory pricing. The ASG said DGCA relied on complaints received by it from passengers to come to the finding relating to discriminatory pricing. Patwalia also argued that DGCA had the power under the rules to regulate air tariff and it can regulate unbundled services, like selection of seats, booking meals etc, by way of its April 30, 2013 circular under which the services were unbundled and that circular has not been challenged. Geoff Swaim Authentic Jersey
Vistara to begin overseas operations with Saarc, Gulf by H2 of 2018
Vistara, which was in the forefront to get the 5/20 rule partially scrapped, today said it “will not be rushing into international operations” and that something towards this is “unlikely before June 2018”, when it will get the delivery of the 20th aircraft. “We are not rushing into international operations. It’s not a race for us. But we will definitely do it. We will get the delivery of our 20th plane by the first half of 2018. “So, with the government retaining the 20-plane clause for international operations, I think we will be able to take a call only after that. Of course, we are reviewing and refining our international strategy,” Vistara chief strategy and commercial officer Sanjiv Kapoor told today. Kapoor, who joined the Tata Sons and Singapore Airlines promoted Vistara only recently, further said their international operations will begin with the Saarc markets and the Gulf as their present set of planes (A320s) could serve short-haul markets the best. Kapoor, who was here to launch a co-branded credit card with Axis Bank, also said the airline, which has only 11 aircraft at present, will get the delivery of two more A320s by October. “The first set of routes that we will launch internationally, will be the routes that can be flown by our existing aircraft (A320s which are narrow body planes by Airbus) which will be routes within three, three-and-a-half hours from our Delhi hub,” Kapoor said. “So, that means South Asian nations will be our first focus international destinations along with the Gulf,” he said, adding markets like Bangladesh, Nepal, Bhutan, the Maldives, Sri Lanka and even Afghanistan have great potential. He said Pakistan is of course the largest market, but that is not likely to happen given the relations between the two nations. Last month, the government had partially scrapped the contentious 5/20 rule, which mandated an airline to have five years of domestic operational experience and 20 planes to become eligible for international operations, by removing the five years of domestic operational experience clause. The new rules came in despite strong opposition and hectic lobbying by older rivals such as Jet Airways, Spicejet and Indigo. A. J. Cann Authentic Jersey
Additional air traffic difficult to sustain unless airport infrastructure is developed: Experts
The aggressive fleet expansion by Indian carriers may far outstrip the growth in demand for air travel, forcing airlines to take a hit on margins. The additional capacity will also be difficult to sustain unless airport infrastructure in the country is rapidly developed, said industry experts. Wadia-group owned budget carrier Go Air on Tuesday said it has signed an initial pact to buy 72 of 180-seater Airbus A320neo planes. Taking these into account, Go Air, IndiGo, SpiceJet and Jet Airways will have ordered a total of 691 planes since 2011. Most of these are narrow-bodied planes, primarily used for domestic operations. Data from a recent note by global consultant CAPA-Centre for Aviation shows that India’s current fleet size is about 63% of South Asian carriers’ fleet size, but its order book is 95% of the total orders from this region. Airbus has said it will deliver one plane every week to Indian carriers for the next ten years. Malaysian low-fare carrier AirAsia Bhd too has placed an order for 100 A321neos. Some of these, or the older planes they replace, will come to its Indian unit. SpiceJet is planning an order of about 100 planes, Air India has said it will lease 44 planes in the A320 family, and Vistara too is expected to place an aircraft order shortly. “We shall see significant oversupply over the next 5-7 years. The orders just placed don’t worry me as they will be delivered several years later. But even going by the previous orders, a total of about 110 planes will be delivered between April 16 and March 18. There will be an impact on yields — there is already a double digit dip — and airlines will return to profitless growth, especially as the cost creep continues,” said Kapil Kaul, CEO, South Asia at CAPA. To be sure, India’s domestic air traffic grew at 18.8% in 2015, the fastest clip in the world, according to data from the International Air Transport Association (IATA). But this will peter out, said analysts. “Our domestic supply-demand model shows an implied annual growth rate of only 14% between FY17 and 20E on the basis of current order book perspective. As such, aircraft supply based on current order book will lag demand leading to potential upward pressure on yields,” said Ansuman Deb of ICICI Securities in a recent note. IndiGo has said the fleet expansion is necessary to unlock India’s massive potential for air travel demand: a miniscule percentage of its 1.3 billion population currently travels by air. Others have said the potential will remain unrealised if the country’s airport infrastructure isn’t developed. “Where are they going to get (flight) slots? Where are they (the planes) going to be parked? Where are they going to fly? Because for the next five years, Mumbai is not going to have a new airport. The other metro airports will also take 4-5 years to build new runways. If they are going to be deployed in routes which are secondary or tertiary, then obviously there will be a lot of capacity added and there will be pricing pressures,” said Sanjiv Kapoor, chief operating officer of Vistara, the joint venture carrier between Tata Sons and Singapore Airlines. Dwayne Harris Authentic Jersey
Air India adds 7 more sectors under ‘Spot Fares’ scheme
Due to popular response and with an aim to enhance growth, Air India has decided to add seven more sectors under its ‘Spot Fares’ scheme. Sectors equivalent to Rajdhani AC II have been added are: Delhi-Ranchi-Delhi, Delhi-Ahmedabad-Delhi, Delhi-Hyderabad-Delhi, Delhi-Bhubaneshwar-Delhi, Delhi-Goa-Delhi, Delhi-Patna –Delhi, Delhi-Raipur-Delhi. The ticket fares on these routes shall be as follows: Delhi-Ranchi Rs. 2,770, Delhi-Ahmedabad Rs. 2,270, Delhi-Hyderabad Rs. 3,275, Delhi-Bhubaneshwar Rs. 3,475, Delhi-Goa Rs. 3,665, Delhi-Patna Rs. 2,315 and Delhi-Raipur Rs. 2,240 respectively. The Spot Fares scheme was launched on select domestic sectors with effect from (wef) June 27 to September 30 (equivalent to Rajdhani Express AC I fares). Delhi-Jammu-Delhi, Delhi-Mumbai-Delhi, Delhi-Kolkata-Delhi, Delhi-Bangaluru-Delhi, Delhi-Chennai-Delhi, Delhi-Ranchi-Delhi, Delhi-Ahmedabad-Delhi, Delhi-Hyderabad-Delhi, Delhi-Bhubaneshwar-Delhi, Delhi-Goa-Delhi, Delhi-Patna –Delhi, Delhi-Raipur-Delhi, Delhi-Thiruvanthapuram-Delhi, Delhi-Guwahati-Delhi. The fares have been further reduced wef July 10 in Rajdhani Express AC II : – Delhi-Mumbai-Delhi, Delhi-Kolkata-Delhi, Delhi-Bangaluru-Delhi, Delhi-Chennai-Delhi. These fares would be available for sale within four hours of the scheduled departure of the flights. These fares are available for sale through City & Airport Booking Offices, Call Centre and Air India Website (www.airindia.in). The above scheme is available more than 100 flights across the country. By introducing these fares we are not only able to generate additional revenue but also able to fill each and every seat till last minute. Lance Alworth Authentic Jersey
We are excited about India, says AirAsia chief Tony Fernandes
AirAsia is excited about India and is looking to accelerate there even though it is a tough market, the budget airline’s chief Tony Fernandes said today. The Malaysian no-frills carrier along with Tatas own the Indian joint venture AirAsia India, which started operations in 2014. Speaking to reporters at the international airshow here, Fernandes said AirAsia is excited about the Indian market. “We are excited about India. It is a tough market… We are looking to accelerate (in India),” the AirAsia Group Chief Executive Officer said. AirAsia holds 49 per cent stake in budget airline AirAsia India, which currently has a fleet of six aircraft. About the Indian government’s decision to do away with the 5/20 international flying norm for local carrier, Fernandes said, “With the change in rule, now we don’t have to wait for five years and 20 aircraft fleet (to fly overseas)”. Last month, the government scrapped the controversial 5/20 norm and now any domestic airline can fly overseas provided they deploy 20 planes or 20 per cent of their total capacity for domestic operations. Referring to the government doing away with the 5/20 norm, Fernandes had said it was almost an end to vested interests. “Almost an end to vested interests. Power to the people. Well done @narendramodi . You kept your word,” Fernandes, who has been vocal against the 5/20 rule, had said in June. Zach Randolph Jersey
Jayant Sinha seeks setting up platform to resolve complaints of air passengers
In a move to empower air passengers Minister of State for Civil Aviation, Jayant Sinha, has sought to set up a ‘warroom’ kind of model that focuses on resolution of passengers’ complaints as and when it reaches them through various modes, including Twitter. The idea was mooted by the minister in the introductory meeting of various departments held on Friday. “The ministry has started working on the idea. The model here cannot be the same as railways since there are private airlines involved,” said a senior aviation ministry official, who did not want to be identified. Sinha, who spent a day with a series of meetings with all departments under the aviation ministry, last week, suggested this during the presentations on the recently-cleared aviation policy and passenger centric initiatives. The minister suggested that the model could replicate the railways model — railways have used Twitter to resolve passenger complaints and improve services. The idea of providing a platform for resolution of complaints was also supported by aviation secretary RN Choubey, who was present in the meeting. Ministry officials, however, feel that the plan is easier said than done. “For railways, it is easier to resolve complaints since it is one entity. In our case, there are private airlines. These private airlines have their presence on social media, where they respond and resolve complaints. These will have to be worked out,” said the official quoted above. The Directorate General of Civil Aviation (DGCA) is likely to be the authority that will be asked to manage the complaints and suggestion since they have the technical wherewithal to resolve such issues. Analysts, however, were less enthused and said the government should rather work on ensuring that the passenger friendly initiatives announced by the government are implemented first. “Who will the government talk to or address its problems, if I have a complaint against a private airline? I do not think that a railway model can ever be implemented in aviation. The government should rather look at providing more teeth to the regulator (DGCA) and to passenger bodies like us,” said D Sudhakara Reddy, president of Air Passengers Association of India. Reddy added that the airlines have moved court opposing the government’s plan to penalise airlines in cases of denied boarding, delays and reduced excess baggage fee. “The government should focus on ensuring that these initiatives already announced is implemented,” he further said. Brad Richardson Authentic Jersey