Monthly Newsletter August, 2012 - apaoindia.comIATA International Air Transport Association ......

ASSOCIATION OF PRIVATE AIRPORT OPERATORS

Monthly Newsletter

August, 2012

Members:

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CONTENTS

1. Aviation Sector ............................................................................................. 3

2. Airports

AAI Managed Airports………………………………………………………………………………16

APAO Member Airports

2.1 Bangalore International Airport Limited……………………………………………..16

2.2 Delhi International Airport Limited……………………………………………………..17

2.3 GMR Hyderabad International Airport Limited……………………………………18

2.4 Mumbai International Airport Limited………………………………………………..19

3. Airlines………………………………………………………………………………………………………20

3.1 Air India………………………………………………………………………………………………20

3.2 Kingfisher Airlines……………………………………………………………………………….23

3.3 SpiceJet………………………………………………………………………………………………23

3.4 Jet Airways…………………………………………………………………………………………24

3.5 IndiGo………………………………………………………………………………………………..25

3.6 GoAir………………………………………………………………………………………………….25

3.7 International Airlines………………………………………………………………………….26

4. Cargo ……………..………………………………………………………………………………………..27

5. AERA Appellate Tribunal Renotified………………………………………………………..28

6. Traffic…….…………………………………………………………………………………………………29

7. Source………………………………………………………………………………………………………32

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ABBREVIATIONS

AAI Airports Authority of India

ADF Airport Development Fee

AERA Airports Economic Regulatory Authority of India

AERAAT Airports Economic Regulatory Authority Appellate Tribunal

ATF Aviation Turbine Fuel

BCAS Bureau of Civil Aviation Security

BIAL Bangalore International Airport Limited

BPCL Bharat Petroleum Corporation Limited

CAG Comptroller and Auditor General

CAPA Centre for Asia Pacific Aviation

CCEA Cabinet Committee on Economic Affairs

CCI Competition Commission of India

CIAL Cochin International Airport Limited

CIDCO City and Industrial Development Corporation

CISF Central Industrial Security Force

COMPAT Competition Appellate Tribunal

CSIA Chhatrapati Shivaji International Airport, Mumbai

DGCA Directorate General of Civil Aviation

DGFT Directorate General of Foreign Trade

DIAL Delhi International Airport Limited

FEE Foreign Exchange Earning

FTAs Foreign Tourist Arrivals

GHIAL GMR Hyderabad International Airport Limited

HPCL Hindustan Petroleum Corporation Limited

IATA International Air Transport Association

ICAO International Civil Aviation Organisation

IGIA Indira Gandhi International Airport, New Delhi

IOCL Indian Oil Corporation Limited

IPG Indian Pilots Guild

MIAL Mumbai International Airport Limited

MoCA Ministry of Civil Aviation

MRO Maintenance Repair Overhaul

NGO Non-Governmental Organisation

PMO Prime Ministers’ Office

PPP Public Private Partnership

RGIA Rajiv Gandhi International Airport, Hyderabad

RTI Right to Information

SEZ Special Economic Zone

UDF User Development Fee

VoA Visa on Arrival

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1. AVIATION SECTOR

1. AAI has increased the charges for ground handling services across 60 of its airports

effective form 1st August. The agencies will have to pay between 32% – 36% of their

revenues to AAI from the earlier 13%. In this context, Airlines Organizing Committee

has written to the Chennai airport authorities asking them to roll back the uncalled hike

on some of royalties collected for ground handling charges from 13% to 32.5% for all

airlines from August 1. AAI is authorised to revoke the licenses and passes handed out to

outsourced ground handling staff of various airlines who handle services like loading,

baggage handling, driving buses and tractors at the airport with the only exception are the

few airlines that are utilising the service of Bhadra International India Ltd, which is a

licensed handler approved by the AAI and has paid the royalty of 32.5%.

2. Visakhapatnam is mulling the possibility of setting up a new airport at Bhogapuram in

Vizianagaram district. The proposal was floated after international and domestic carriers

expressed their inability to operate their services before 8am and after 8 pm due to

restrictions imposed by the Eastern Naval Command on the existing Airport, which is a

naval airport converted for civilian use.

3. A new system User Preferred Route will soon be introduced for international flights in

the country which is at present being used on a trial basis by the Air Navigation System,

a wing of the AAI. The new system will allow flight operators to change their path plan

depending on wind direction, as against standard aviation routes. Under the User

Preferred Route, the pilot will study tentative weather conditions and adopt a suitable

route before departure. The system is applicable only to non-stop point-to-point flights. It

will help significantly in reducing fuel consumption up to 5%, hereby cutting down on

carbon emissions, which will directly save costs for the airlines. The reduced fuel

consumption would help airline operators reduce passenger fares and flight operation

times will also come down.

4. India has joined the US and 15 other major countries in opposing European Union’s

Emissions Trading Scheme which requires carriers flying to or from Europe to offset

their carbon emissions.

5. Prime Minister Manmohan Singh on 2nd

August decided to relaxed rules for transfer of

government owned land to speed up PPP projects. The measure will greatly help in

awarding PPP projects in roads, railways, civil aviation, ports and metro rail. The

decision will do away with the requirement of Cabinet approvals that was leading to long

delays in awarding concessions for infrastructure projects particularly PPPs.

6. Airport Advisory Committee, Chairman Saugata Roy on 3rd

August informed that the

work on the new integrated terminal of Netaji Subhas Chandra Bose International Airport

is expected to be completed by September 30.

7. Flights from Singapore to Tiruchi and Kuala Lumpur to Tiruchi have begun using the

new Air Traffic Services route with effect from July 26. This has cut down flying time

and enabled airline operators to save aviation turbine fuel. Air Asia, Tiger Airways and

Air India that operate flights in the Singapore-Tiruchi-Singapore and Kuala Lumpur-

Tiruchi-Kuala Lumpur sectors will gain operational advantage by saving fuel and time by

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using the new route. The new route has cut down flying time by 17 minutes from

Singapore to Tiruchi and from Kuala Lumpur to Tiruchi and reduced the distance by 44

nautical miles. Fuel saved per flight was about 1,800 kilolires.

8. Mizoram Government from August 14th

has introduced helicopter services in remote and

bordering areas to oversee developmental works, provide connectivity to people in

emergency situations and carry dignitaries.

9. AAI has refused the lessors to take back 6 aircraft parked at Chennai Airport rented out

to Kingfisher Airlines after the airlines defaulted on rentals. AAI’s contention is that it

cannot let the aircraft go, as it too has to recover dues of about Rs 300 crore on account

of landing and parking fees from Kingfisher Airlines. After much pressure from lessors,

Kingfisher Airlines deposited Rs 1 crore to AAI only after which the 2 planes were

released.

10. DGCA has issued a circular in July which makes it mandatory for all cabin attendants to

undergo medical tests to check whether they meet required height, weight, body mass

index, waist-hip ratio, blood pressure and blood sugar standards. This would be the first

time DGCA has imposed such criteria but avoided terming as physical standards. The

guidelines also make it mandatory for cabin crew in certain age groups to be screened for

some types of diseases.

11. MoCA has created a new post of Joint Secretary and appointed Mr. Prabhat Kumar, a

UP cadre IAS officer who will handle the portfolio of Air India along with bilateral

agreements. MoCA now has 4 JS-level officers.

12. DGCA has started a fresh safety audit of all scheduled airlines in the country in the mid

August. Safety audit would be conducted on the operational aspects regarding flight

operations of all the scheduled carriers and will last about a month. Teams have already

been constituted to begin the process. DGCA had conducted a safety audit of all the

airlines in December in which they found serious irregularities with Kingfisher and Air

India Express.

13. AAI has re-notified the runway length at Jaya Prakash Narayan International Airport in

Patna. Effective from August 31, the revised length of the runway will be 1141 meters

instead of the earlier 1677 meters form the Phulwarisharif end. The runway from Patna

Zoo end will now be 1289 meters instead of 1820 meters. The runways are now

unsuitable for the operation of big aircraft. The minimum runway length required for

Airbus-320 and Boeing 737 aircraft to land is 1540 m and 1790 meters. On 8th

August,

Chief Minister Nitish kumar sought help from Minister of Civil Aviation Ajit Singh and

requested him to either himself visit Patna or send a team of officials to inspect the

changes effected to improve safety requirements.

14. Bank of America-Merrill Lynch on 6th

August said that the industry is on a revival and

will return profitability next fiscal, following the surprise profits reported by Jet Airways

and SpiceJet.

15. PMO has paved the way for round-the-clock customs clearances at identified sea ports

and airports in order to facilitate trade services. One of the major constraints for

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international trade has been the non-availability of customs clearance and other facilities

at airports and seaports round the clock, seven days a week. This means that import and

export cargo, delivered at a time when clearance facilities are unavailable, have to wait

till clearance facilities are open to move on to their destination. At airports and seaports,

which in any case normally operate round the clock, cargo piles up awaiting clearances.

The 4 airports where the facility would be available are Bangalore, Chennai, Delhi and

Mumbai and the 4 ports are Chennai, Kolkata, Kandla and JNPT (Navi Mumbai) and

Mumbai.

The facility would be made available on a pilot basis for 4 months, with customs

operations along other government agencies such as the concerned port/airport authority,

drug controller, Food Safety and Standards Authority of India, quarantine, etc., and

private players such as custodians, Customs House Agents, banks, transporters, etc. The

24x7 operations would be available for certain categories of imports and exports. For

imports, the category “No Assessment No Examination” will be covered. This would

account for 70% of imports. For exports, the 24x7 facility could be extended to those

exports not claiming benefits. For smooth operationalisation of 24x7, the Commissioner

of Customs concerned at these locations shall hold meetings with all stakeholders. Such

additional staff that is required to start these operations shall be redeployed from existing

resources. Secretary, Commerce and the Director General, Foreign Trade shall also hold

meetings with other support agencies to facilitate and ensure 24x7 operations.

16. Business Aircraft Operators Association in August 2012 filed a petition with the AERA

challenging MIAL’s power to impose penalty charges ranging between Rs 1,000 and Rs

15,000 per hour for overstaying and extended use of parking bays, which are 30-40 times

more than parking charges. MIAL has 28 parking bays only and so overstaying planes

upset the tight parking schedules. The move is to improve airside safety and decongest

the already logged parking space at the land constrained CSIA.

17. Delhi High Court on 7th August ordered the Centre to revive AERAAT within a week.

The court said that failing this, the plea for stay of Indira Gandhi International Airport’s

three-fold-hike in airport levy would be heard.

18. Board of Airline will hold a meeting in mid-August to chalk out a common strategy to

deal with the hike of 344% on Delhi Airport charges which according to them made

major airlines re-work the investment plans and strategy towards India.

19. MoCA is working with Planning Commission on a new public-private partnership model

to get investments in airport infrastructure in which the tariffs will be fixed before the

bidding and then companies can compete based on who offers the most revenue share.

India need about Rs 70,000 crore of foreign investment in 5 years to develop new

airports.

20. MoCA is working on a proposal to set up an air transport economic regulator to keep a

watch on big increases in airfare and predatory pricing. The regulator will function within

MoCA and will enforce fare transparency under various price buckets. It will track

monthly data from airlines on fuel charge break-ups, tax payments and the number of

tickets offered and sold in various price brackets. The move will help the Government

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keep tabs on the correlation between seats available, prices offered, taxes levied and the

final pricing of air tickets to consumers. Once approved, the regulator will make it

mandatory for all airlines to furnish these details. The details will then be put up on the

regulator’s website where consumers can cross check reasons why a particular air ticket

offered by airlines is costly or cheap.

21. Minister of Finance in his reply to Lok Sabha on 8th

August informed that Aviation

companies as on June 2012 owed Rs 40,621 crore to banks of which the outstanding loan

by State Bank of India is Rs 5,120.74 crore, Punjab National Bank is Rs 4,010 crore,

Bank of India is Rs 4,614 crore, Bank of Baroda id Rs 4,133 crore, Canara Bank is Rs

2,327 crore, IDBI Bank is Rs 2,550 crore, Yes Bank is Rs 770 crore and HDFC Bank is

Rs 23 crore. The banks have disbursed Rs 47,056 crore to airline companies from 2009-

10 to June 30, 2012.

22. CISF has sent a presentation to the Ministry of Home Affairs against the proposal to

create an exclusive Aviation Security Force for airports across the country. If the

proposal is accepted, CISF will be given three years to leave the charge of airport

security. A panel of the ICAO had visited last year and recommended to bring legislative

changes and form a new ASF under the control of the BCAS. The panel also said all

CISF officials presently on airport duty should be retained for three years and new

recruitment be made in the mean time.

23. Tata - Lockheed Martin JV has approached the state government with a request to

provide them with 300 acres of land and an airstrip for the proposed aircraft

manufacturing facility. Government is proposing of allotting the Nadergul airstrip,

Andhra Pradesh.

24. MoCA has asked all domestic airlines to submit by August end their plans for operating

international flights till March 2014. MoCA is against allowing international airlines

operate more flights into India till domestic carriers catch up. At present, foreign airlines

weekly operate 1,356 flights to India, while Indian carriers offer 800 international

services.

25. Jammu and Kashmir Government has ordered the adoption of standard precautionary

measures and scientific disposal of garbage around airport to reduce bird activities for

safety of flights.

26. Minister of Civil Aviation Shri Ajit Singh has ordered AAI to recover dues of Rs 77

crores from TDI International India Ltd, an OOH (out-of-home) advertising company by

August 16. If TDI International fails to comply with the deadline, license might be

cancelled and action for recovery will be taken.

27. Minister of Civil Aviation Shri Ajit Singh has asked Air India to withdraw the facility

available to pilots to travel as additional crew members during their time off or leave, the

decision was taken after discovering that a grounded pilot has used this facility to travel

to Dubai. He has also formed an expert committee to restore, catalogue and evaluate the

950 paintings, bronze and stone sculptures Air India has bought over the last 4 decades.

The estimated worth of the collection has been pegged at Rs 350 crore.

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28. PIL on 13 August urged the Supreme Court to quash the lease deeds for airports in Delhi

and Mumbai to two private operators saying that the then Civil Aviation Minister Praful

Patel, knowingly and deliberately and under planned concocted conspiracy, transferred

public properties, valued at over Rs 2,68,000 crore to private companies- GMR- DIAL

and GVK-MIAL.

29. AAI has awarded Larsen and Toubro the construction of a new integrated terminal

building and allied works at Chandigarh Airport worth Rs 674 crore.

30. Minister of Civil Aviation Shri Ajit Singh in a written reply to a question in Rajya Sabha

on 14th August informed that to review the implementation of the Financing Plan

prepared in 2006 and to prepare a Financing Plan over the Twelfth Five Plan period, a

Task Force on Financing Plan for development of airports has been constituted under the

Chairmanship of Member, Planning Commission. The Task Force has recommended that

operations and management of Chennai and Kolkata Airports could be taken up through

PPP mode. Similarly, it has also been recommended that operations and management of

airports at Jaipur and Ahmedabad may also be taken up through PPP mode. The Task

Force emphasized that projected investment at these airports can fructify only if the PPP

approach was adopted extensively. This would not only help attract the requisite volumes

of investment, it would also ensure generation of significant volumes of non-aeronautical

revenues that would help reduce the passenger charges to affordable levels. The task

force in its report further recommended that while structuring this arrangement, it should

be ensured that the interests of the existing employees of AAI are fully protected. The

report suggested that the Chennai airport be given to a private operator under PPP within

the next 4 months, followed by the Kolkata Airport.

31. AAI has got the nod of AERA for levying UDF of Rs 400 on every flying domestic

passenger and Rs 1,000 on an international passenger from January 1, 2013 at Kolkata

Airport and only consultations with the stakeholders is left before the actual notification

is issued. Based on traffic levels of 2011-12, AAI would earn about Rs 500 crore from

the proposed UDF levies. In addition, AAI has also proposed an increase of 118% in

international landing charges, 48% increase in domestic landing charges and 8% increase

in prevailing cargo rates from November 1.

32. AAI has also proposed a UDF of Rs 165 on every passenger boarding a domestic flight

and Rs 667 on every passenger for an international flight from Chennai Airport to the

AERA to be levied from January 1, 2013. In addition, AAI has also proposed an increase

of 118% in international landing charges and a 48% increase in domestic landing charges

and proposed a minimum fee of Rs 5,000 per landing on all flights.

33. Odisha Government has proposed to develop Greenfield airports in 5 locations in an

effort to boost intra-state and inter-state civil aviation facilities. The 5 airports will come

up in the industrial hubs of Rayagada, Paradip, Dhamara, Angul and Kalonganagar. The

proposal is also on the anvil to upgrade existing airfields at Gopalpur, Jharsuguda, Barbil

and Rourkela.

34. Minister of Civil Aviation Shri Ajit Singh has taken a serious note of the complaints of

irregularities in the construction of the New Terminal Building of the Chaudhary Charan

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Singh Airport, Lucknow and has decided to refer the matter to the Chief Technical

Examiner’s Wing of the Central Vigilance Commission for conducting a detailed enquiry

into construction of the building. The decision is based on a preliminary enquiry report

submitted by a committee which was headed by Shri Samir Sahai, Chief Vigilance

Officer, Pawan Hans Helicopters Limited. This committee was constituted following

various complaints received from Members of Parliament and news items published in

this regard in newspapers. The report submitted by the enquiry officer has prima facie

substantiated various defects in the construction quality, design and maintenance of

Lucknow Airport Terminal.

35. Minister of Civil Aviation Shri Ajit Singh in his written reply to Rajya Sabha informed

that 5 domestic airlines – Kingfisher, Jet, IndiGo, Go Airlines and Air India - have been

allowed to import ATF by the DGFT. Kingfisher has been allowed to import 5 lakh

kilolitres of ATF worth Rs 2,233 crore, SpiceJet 50,000 kilolitres, IndiGo 7.15 lakh

kilolitres, Go Airlines 2 lakh kilolitres and Air India 1 lakh kilolitres.

36. State Governments have turned down most of the 61 requests for land allotments made

by AAI for projects across the country. AAI had identified land needs of 21,939 acres

and requested states to put aside land for upgrading 61 airports. States have responded

positively to just 26 requests.

37. CAPA report ‘India Under-prepared for Major Capacity Challenge’ states that domestic

airports need investments of at least $40 billion over the next 13 years i.e. till 2025 to

keep pace with the expected growth in air passenger traffic from 143 million in 2010-11

to 452 million by 2020-21. But for these investments to be feasible, land must be

allocated right away. The Land Acquisition Bill(amendments) which will shortly be

considered by Cabinet will lead to a further increase in prices as the legislation seeks to

protect the rights of landowners whose property is acquired for major projects.

38. CAG in its report has accused MoCA and AAI of ruling in favour of DIAL and against

the interest of the government. According to the report tabled in Parliament on 17th

August, GMR Group with an equity contribution of a mere Rs 1,813 crore in DIAL got

an airport in the national capital for sixty years in addition to commercial rights of land

currently valued at a phenomenal Rs 24,000 crore with an income generation potential of

Rs 1,63,557 crore. The report points out that DIAL is entitled to commercial

exploitations of 5% of the total area of 4,790.09 acres, which works out to 239.95 acres.

The earning capacity of the land in terms of licence fee over the concession period of 58

years was indicated by DIAL itself as Rs 681.68 crore per acre which amounts to Rs

163,557 crore, share of DIAL would amount to Rs 88,337 crore. CAG further pointed

that the government’s decision to allow levy of development fees was a “post-contractual

benefit provided to DIAL” at the cost of passengers who were taxed for using Delhi

airport amounting to Rs 3,415.35 crore. CAG further said undue favour was granted to

DIAL, which led to a loss if Rs 239.69 crore during 2006-11 to the Public exchequer, as

funds were diverted from Passenger Service Fee escrow account for purchase of security

equipment by the DIAL. The Public Accounts Committee of Parliament on 23 August

has decided to examine the report of CAG on DIAL.

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39. MoCA strongly refuted the loss figures and other allegations as made in the CAG report

on IGIA saying it is incorrect to say that undue benefits were accorded to DIAL in the

Delhi Airport modernization project. The terms and conditions in the bid document were

reviewed by an empowered group of ministers and approved by cabinet. MoCA further

said that the calculation of presumptive gain from the commercial use of land at the Delhi

Airport is totally erroneous and misleading as it simply adds the nominal value of the

projected revenue, without taking the net present value. In fact the net present value of

the figure quoted by CAG is Rs 13,795 crores only.

40. Ministry of Corporate Affairs has ordered an inspection of the account of Kingfisher

Airlines after receiving complaints from stakeholders alleging violation of company law

like provisions on debt-equity ratio.

41. MoCA is reconfiguring its policies and is adding an expert in the aircraft acquisition

committee to do an in-depth analysis of the import requests by several airlines and

operators. Currently, all the acquisitions are cleared on the basis of macro numbers of

demand and supply. MoCA has decided to do a route or region-wise demand and supply

analysis for which the import request is made.

42. A committee formed by Civil Aviation minister Ajit Singh to study route dynamics of

Air India has submitted its report in July end and supported Air India’s contention that

private Indian carriers should not be allowed to fly international routes on which it is

incurring loss. The panel report did not give reasons for supporting Air India’s stance.

43. A committee of secretaries which was constituted to look at ways to bring down the ATF

prices has suggested that ATF be given ‘declared goods’ status as it would then attract

only 4% sales tax as against a varying sales tax that ranges between 4 and 30% that is

charged by different states.

44. Government is planning to hike the current denied boarding compensation of about Rs

2,000 by making it directly proportional to the price at which the air ticket was bought.

45. The Cidco, the nodal agency for the Navi Mumbai International Airport project, on 18th

August sought Prime Minister Manmohan Singh’s intervention for an early approval of

the request for qualification (RFQ) for the project. Cidco also sought financial assistance

from the Centre for pre-development costs. Total project cost has been pegged at Rs

14,000 crore, of which Rs 9,000 crore is for phase I. The pre-development cost is about

Rs 4,000 crore.

46. MoCA is reviewing the controversial current rule that an airline must be 5 years old and

have a fleet of at least 20 aircraft to become eligible to fly overseas. India is the only

country globally to have such strict rules.


on 21st August informed that the growth in the investment in the airport infrastructure in

the country has been higher than the growth of economy because air passengers traffic

has been consistently growing at a higher growth rate than the growth rate of GDP. The

passengers traffic from 2001-2002 to 2011-12 (last 10 years) has grown @ 15% as

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against the GDP growth rate of 7% to 9%. To cope up with the higher growth of air

traffic, the investment in airports was made keeping with the growth in the traffic. At the

end of XI Plan (2007-2012), total passenger handling capacity at all Indian airports was

197.77 million against the demand of 162.30 million passengers i.e. capacity is ahead of

demand.

48. Airlines have hiked the various charges from Mid-July:

a. Domestic ticket Cancellation Charges hiked by 30% from Rs 750 to Rs 950.

b. International ticket Cancellation Charges tickets hiked by Rs 5,000.

c. Children up to 12 years travelling without guardian being charged Rs 1,000

(earlier no charges).

d. Extra Baggage charges per kg doubled from Rs 100 to Rs 200.

e. E-ticket print out charge Rs 50

49. Communist Party of India (Marxist) MP K Balagopal on 20th

August alleged that the

Government, including the prime minister, was aware of the malpractices in development

of IGIA and demanded probe by the central agency in the matter.

50. MoCA on 21st August told Parliament that Air India’s loss have been constantly

mounting since the five year old merger with Indian airlines and the collective losses

from 2007-08 to 2011-12 are now Rs 28,046 crore. He further informed that only 16 of

184 flights of Air India between April to June have met their total costs, while the rest

made operational losses.

51. Supreme Court on 21st August directed the Government to file an affidavit mentioning as

to who is levying the ADF, who is collecting it and the authority which is utilising the

fund collected from passengers at the IGIA on a petition by Consumer Online

Foundation, a NGO which has challenged the legality of the levy.

52. The Infrastructure Development Department in an effort to woo airline companies to

operate at minor airports in the Karnataka has planned to submit a proposal to the

government for offering the much-needed support to the companies to make their

operation at these airports sustainable. Infrastructure Development Department wants the

Karnataka Government to either underwrite a certain number of seats on every flight or

reimburse a portion of operational cost on flying-mile-basis for a fixed duration. The

support is planned to be extended for only intra-state flights.

53. MoCA has asked Air India to start maintaining a profit and loss data of all routes it

operates on its network. This order was issued after a committee formed to study the

route dynamics of Air India found that the figures shared by the airline were not arrived

at on the basis of revenue and expenditure but on fuel and food consumption during the

flight.

54. Minister of Civil Aviation Shri Ajit Singh in its response to parliamentary question has

revealed that in 2012 alone 19 cases of misdemeanour and financial irregularities include

several incidents of overcharging, fraudulent billing and taking undue advantage of

airline facilities by crew and senior management have surfaced in Air India. On 21st

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August, Minister of Civil Aviation Shri Ajit Singh informed that Air India is offering

VRS to a select group of employees as Air India seeks to bring down the number of

employees per aircraft. Minister of Civil Aviation Shri Ajit Singh has issued orders to Air

India banning free excess baggage carried by passengers on the airlines domestic and

international flights. Henceforth any excess baggage carried by passengers would have to

be compulsorily paid. Currently, the “usual practice” is to levy an extra charge on

passengers for any excess baggage carried but airline had the discretion to “waive off”

the extra charges in some cases.

55. Business Aircraft Operators Association has requested MoCA for opening up of old

airports of Bangalore, Hyderabad and Delhi’s Terminal 2, 1B and 1C for use as business

aviation terminals. Business Aircraft Operators Association stated that India has the

potential to grow at 25% in the aviation sector against the present meagre 7%.

56. DGCA has written to the Federal Aviation Authority in the US seeking a report on a

Boeing 787 aircraft that Air India is to take delivery of. Investigations began after a

malfunction spewed metal debris from a GE engine on a Boeing 787 aircraft and caused

an airport grass fire in South Carolina in late July. Reports said that the material was

ejected from the back of the engine during pre-flight testing.

57. Air tickets have become costlier with the airlines increasing the fuel surcharge by Rs 100

to Rs 150 following a steep hike in aviation fuel prices by the oil companies in August.

The airlines have issued a circular to their travel agents informing them about Rs 100

hike in the fuel surcharge till 1,000 km and Rs 150 for flights beyond that distance.

58. AAI in a reply to a RTI application filed disclosed that Mangalore Airport continues to

have concrete structures at the end of the runway and that five other airports – Patna,

Calicut, Jammu, Port Blair and Agartala – have similar structures.

59. CAPA in its report on Indian carriers has projected that without an investment of

approximately $600 million in the next 30 to 60 days and access to a further $400 million

over the next 12 to 18 months to fully fund its business plan, Kingfisher faces the

prospect of an operational shutdown temporarily to allow it to restructure and reorganise.

CAPA further mentioned that GoAir and IndiGo have earned profits worth $24.3 million

in the three months ended 30 June even as Kingfisher Airlines is close to shuttering

operations. IndiGo earned a profit of $18.9 million in the quarter while GoAir made

around $5.4 million. The report further mentioned that Indigo, SpiceJet, GoAir, Jet

Airways and JetLite are estimated to have profited around 224 crore during the first

quarter of 2012-13 and are on track to achieve 1,120 crore profit for the full year. Air

India’s domestic performance is headed in a positive direction for the first time in several

years. Based on its Q1 performance and subject to sorting out issues with the pilots to

allow international operations, a robust result in Q3 and Q4 could see AI’s projected full

year loss for FY13 decline from $1.3 billion to just under $1 billion.

60. AAI has completed development works at 27 of the 35 Brownfield non-metro airports on

the back lease rentals from Mumbai and Delhi Airports. The lease rentals from Delhi

Airports have increased almost three-fold since 2006-07, whereas from Mumbai Airport,

it has gone up by 37% since 2007-08. Among the few cities where new international

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terminal buildings have been commissioned are Ahmedabad, Trivandrum, Chandigarh,

Varanasi, Amritsar, Dehradun and Vizag.

61. AAI has taken up an ambitious project to bring the airspace of all of eastern India under

surveillance. This will augment the safety of air travel on the region and also enhance the

capacity of the airspace allowing more flights from Kolkata to various destinations. At

present, only half of the 400,000 square nautical miles of airspace in eastern India that are

under the Kolkata Flight Information Region are under surveillance.

62. Maharashtra Government has sought more powers to speed up the pre-bid process for the

Navi Mumbai airport project. It is seeking powers akin to those granted to the steering

committee under MoCA. If permitted, it would allow the State Government to fast-track

the approval process of airport development companies, who could then participate in the

commercial round of project bids.

63. Minister of Civil Aviation Shri Ajit Singh in a reply to a question in the Lok Sabha

informed that DIAL did not need a no-objection certificate from the aviation security

regulator for its aerocity project.

64. DGCA is seeking assurance from Kingfisher Airlines on maintain its schedule.

Kingfisher Airlines have sought to add 40 more daily flights.

65. Supreme Court on 27th

August disposed a petition pertaining to a dispute between pilots

of erstwhile Indian Airlines and Air India over flying the new Boeing 787 aircraft after

stressing that pilots for training on the plane should be drawn equally from both Air India

and Indian Airlines till a final adjudication of the dispute by the Bombay High Court.


on 28th August informed that air fares applicable for domestic passengers are determined

by market forces and are not fixed by Government. The Tariff Monitoring Unit of DGCA

monitors the airfares manually on regular basis on certain sectors. It has been observed

that the airfare remains well within the fare buckets and there is no steep hike in air

fares. With a view to maintain transparency in tariff publication, DGCA has taken

following steps:

• Scheduled domestic airlines have been directed to display established tariff route-wise

and fare category-wise in their websites, on monthly basis and also to notify any

significant and noticeable changes to DGCA within 24 hrs of effecting such a change.

• A Tariff Analysis Unit has been set up in DGCA to monitor tariff on regular basis at

periodic intervals.


on 28th August informed that ICAO would be conducting an ICAO Coordinated

Validation Mission (ICVM) of India to assess and validate the corrective actions taken by

India on the findings and recommendations of the audit of India conducted by ICAO in

October, 2006. The audit of October, 2006 resulted in 70 findings and recommendations

in the areas of legislation, organization, operations, airworthiness, licensing, aerodromes,

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air navigation services and accident investigation. The main areas of concern related to

shortage of manpower in DGCA, lack of regulation of air navigation services in India,

independence of aircraft accident/incident investigation and enforcement of aviation

regulations. A majority of the findings and recommendations have been implemented.

Though there is a shortage of manpower in the DGCA, it is functioning effectively by

engaging/hiring the consultants and technical inspectors on secondment etc.


on 28th August informed that IATA had earlier furnished a graphical comparison with

other 26 world airports and observed that out of these airports, IGIA is the costliest

airport. However, on compilation of charges of other world airports from ICAO

documents 7100-2011 and revised charges of IGIA, it is revealed that the IGIA stands at

7th for long haul international, 6th for medium haul international and 19th for

short haul international from the top.

69. DGCA’s fare analysis for July has showed that fares have dipped in the lean travel month

over June. The analysis also showed that IndiGo and Jet Airways had about 10% and

15% higher fares than their peers in the low-cost and full-service segments, respectively.

70. According to a recent data by Internet and Mobile Association if India, online air ticket

bookings increased to 1.95 million in July 2012, up 34%, compared to 1.46 million in the

year ago period.

71. According to a study released on 28th

August by Boeing, Asian airlines that are now

recruiting pilots abroad will need almost 2,00,000 pilots over the next two decades, with

India and China accounting for the bulk of the demand.

72. Minister of Civil Aviation Shri Ajit Singh has objected to the Land Bill saying that the

large tracts of land would need to be acquired for building airports and the provisions of

the land bill would make such development prohibitively expensive.

73. AAI has launched ACI-ICAO Aviation Management Professional Accreditation

Programme (AMPAP). The duration of AMPAP is one year during which 4 mandatory

and 2 elective courses will be delivered by ACI-ICAO faculty leading to certification of

the executives as International Aviation Professional.

74. AAI has increased royalty charges for MRO at all AAI-owned airports in the country

form August. For Western Region increase is 36.3%, Southern Region 31.8%, Northern

Region 21% and Eastern & North Eastern Region 13%. The move will directly impact

the MRO service providers who operate from the Airports that are run by the state-owned

airport authority as these companies would now have to charge their clients the additional

tax along with 12% service tax.

75. DGCA has grounded the indigenous Dhruv helicopters after they were found to have

some technical flaws. The helicopter is used by various state governments and the

security forces fighting Maoists.

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76. Supreme Court on 30th

August refused to stay the government’s order asking private

airlines to shell out higher royalty charges under the new ground handling policy.

77. Minister of Civil Aviation Shri Ajit Singh has directed the AAI not to undertake

proposed construction work for runway extension at the Jaipur Airport during the day

time in the winter season. In a letter to the Chief Minister of Rajasthan Shri Ashok

Gehlot, Shri Singh has assured that the work on extension and strengthening of the

runway at the Jaipur Airport has been tentatively planned to be taken up at night hours

only during the next summer schedule to ensure minimum disruption of flights. Shri

Singh clarified in his letter that the proposal of the AAI to close the runway from 1100 to

1800 hours during winter schedule has been reviewed and not approved. AAI had

decided to close the runway at the Jaipur Airport during winter schedule for taking up

construction work relating to extension and strengthening of the Airport. Shri Gehlot in a

letter to Shri Singh had requested to get the matter examined stating that the work

planned for two years starting from October 2012 everyday will have severe and crushing

impact on tourism in Rajasthan. The decision was also opposed by various tourism

associations in the State.

78. Minister of Civil Aviation Shri Ajit Singh in a reply to a question in Lok Sabha informed

that Air India is facing a shortage of commanders and first officers to operate its fleet of

wide and narrow body aircraft for international and domestic operations. For Boeing 787

aircraft there is a need for 90 pilots but only 4 are available, for 18 Boeing 777 aircraft

there is a need for 396 pilots but only 297 are available. Air India has surplus pilot

strength for flying its Boeing 747. He further informed that 121 pilots were undergoing

training for Boeing 777, 10 for Boeing 747 and 77 for Boeing 787 aircraft. There are 779

pilots with Air India to operate narrow body aircraft like Airbus 320, Airbus 319, Airbus

321 and Airbus 330.

79. Haryana Government is seeking the Centre’s intervention to have at least two domestic

airports in the state, besides establishing stakes in the Chandigarh International Airport.

Hayyana Aviation Department has been persuading the Chief Minister to get the two out

of its three Aviation Training Centres at Hissar and Karnal converted into domestic

airports as they already have airstrips from where small planes can operate.

80. COMPAT has set aside Rs 72.5 lakh penalty imposed by CCI on Kingfisher Airlines,

which was charged with not furnishing certain information during a probe into a strategic

pact announced with Jet Airways in 2008.

ATF FUEL PRICES

1. On 1

st August, IOCL, HPCL and BPCL hiked the ATF prices by 4.5%. ATF in Delhi

hiked by Rs 2,797.41 per kilolitre (kl) or 4.5% to Rs 65,005.59.

2. On 16th

August, ATF was hiked by over 3.2%, the third straight increase since July,

adding to the cost burden of airlines. The price of ATF in Delhi was hiked by Rs

2,130.17 per kl or 3.27% to Rs 67,135.76 per kl.

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3. ATF suppliers like IOCL, HPCL and BPCL have reported a 4% drop in demand for ATF

in the first four months of the current financial year as airlines in the country cut flights to

reduce their losses. ATF suppliers together supplied around 5.5 million tonne of ATF in

the financial year ending March 2012 registering a growth of 9% in demand.

4. ATF prices on 31st August were hiked by a steep 7.6%. The price of ATF in Delhi was

hiked by Rs 5,146.16 per kl to Rs 72,281.92 per kl with effect from 31st August midnight.

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2. AIRPORTS

AAI MANAGED AIRPORTS

1. Calcutta Airport’s new integrated terminal had its first trial run with multiple flights on

17th

August in the domestic arrival area.

2. AERA has issued a Consultation Paper on Multi Year tariff proposal and Annual tariff

proposals in respect of Chennai International Airport, Chennai for the first Control Period

(2011-12 to 2015-16) on 23rd

August, 2012.

3. AERA has issued a Consultation Paper on Multi Year tariff proposal and Annual tariff

proposals in respect of Netaji Subhash Chandra Bose International Airport, Kolkata for

the first Control Period (2011-16) on 30th

August, 2012.

APAO MEMBER AIRPORTS

2.1 Bangalore International Airport Pvt. Ltd.

1. BIAL was awarded the Excellent Energy Efficient Unit Award in the CII National

Energy Award. BIAL was shortlisted among 53 energy efficient units to become

eligible for the final presentation in the event. BIAL was selected among the top 26

Companies in India for this award.

2. Bengaluru International Airport has secured Code F compliant certification by the

DGCA, making it the third airport to get ‘Code F’ compliance after IGIA and

GHIAL. Bengaluru International Airport can now handle largest passenger aircraft

including the Boeing 747-800 and A380 that needs Code-F compliant airport.

3. BIAL plans to add capacity at the airport gradually and plans to complete before the

end of 2013. The second runway will be completed in 3-4 years which will have the

Category IIIB landing system which will enable operations in foggy conditions.

4. For the second consecutive year, BIAL landscape was awarded the Best Maintained

Landscape/Garden in the Big Garden Category at the recent Bangalore city

Landscape Garden competition organized by the Mysore Horticultural Society. BIAL

also opened its landscape gardens and specialized nursery to schools in the vicinity

for educational purposes from August 10 till August 17. Through the landscape tour,

the students will gain knowledge on various plant species and their environmental

impact. The landscape design at BIAL was based on Bangalore’s reputation as the

garden city and the rich heritage and culture of Karnataka. The green landscape

encompasses an entry experience at the trumpet, Heritage Boulevard, roundabouts,

Garden Boulevard, the central park and the entry garden.

5. BIAL organized a two day seminar titled ‘Safety First, Together We Can’ with an

objective to provide a platform for safety related information and interface safety

management systems of airports and airlines across the country.

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2.2 Delhi International Airport Pvt. Ltd.

1. DIAL has rejected the claims by CAG in its report ‘Implementation of Public Private

partnership at Indira Gandhi International Airports, Delhi’ in which it is mentioned that

a. DIAL was given undue benefits from the government before, during or after the

bidding process. The entire process of the privatization and selection of Joint Venture

was based on a transparent, international, competitive bidding which was guided and

presided over by competent bodies and has been upheld as such by the Hon’ble

Supreme Court in 2006.

b. DIAL was effectively handed over land valued at Rs. 1,63,557 Crore for only Rs. 100

per year. The purpose of leasing the airport land by AAI to DIAL was neither sale of

land nor earning of a rental income from it. The basis of providing the concession to

operate the airport was the revenue share quoted by the bidders to AAI. The entire

commercial land available with DIAL neither has any immediate commercial value

nor can be put to use and therefore cannot be monetized immediately. Thus, just

using value of one acre and extrapolating the same for the entire land parcel is at best

an arithmetic exercise and not practical. In fact, using the same method of calculation,

AAI will receive Rs. 3 to 4 Lakh Crore from DIAL as revenue share over the 54

years.

c. ADF was an afterthought and done only to benefit DIAL. ADF is allowed as per

section 22 A of AAI Act 1994 as amended in 2003 – long before the bidding process

and was known to all bidders. AAI Act is the primary governing legislation for the

concession as provided in the transaction documents. The levy of ADF was upheld by

the Hon’ble Supreme Court vide its order dated 26th April 2011

d. The concession period of 30 years with 30 years extension being an unfair advantage

to DIAL. Such long concession periods are quite normal in infrastructure projects

where the investment is large and gestation period is long. Moreover, as this was a

bid condition known to all bidders, they had already considered this condition while

quoting the bids.

2. IGIA’s upcoming air traffic control (ATC) would be the country’s tallest ATC tower at

102 meters. The ATC Tower will be the seventh tallest ATC tower in the world and

would also have earthquake-resistant technology which will be used for the first time in

India. The tower will have a 50 tons Tuned Mass Damper that will prevent the tower

from extra sway during wind and earthquake. The tower is expected to be ready by

December 2013 and should become operational by early 2014.

3. DIAL is taking steps towards becoming an international airline hub and the government

is supporting the move to make the capital city a hub that goes beyond picking up transit

traffic from neighboring countries. As part of its new strategy, Delhi Airport is cashing in

on the growing business traffic between Africa and China by offering their airlines a

stopover in Delhi, where they can drop as well as pick up new passengers (under the sixth

freedom granted by the government). For stopovers in Delhi, DIAL is also wooing

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central Asian airlines, many of which have smaller aircraft and cannot fly directly but

want to carry passengers to leisure destinations in Southeast Asia.

4. IGIA Terminal 3 has been ranked 9th amongst the Top 10 Airports Worldwide in the

recently concluded BEST IN TRAVEL POLL 2012 by Smart Travel Asia. The voters

spots “aspirational” brands and offers unique insights into brand perceptions and trends.

Voters took an average 16.22 annual air trips with roughly 70 percent based in Asia, 15

percent in UK/Europe and 15 percent in USA/North America. The three-month poll is

both democratic and global.

2.3 GMR Hyderabad International Airport Pvt. Ltd.

1. GHIAL has awarded contract for Flexible check in Project, which enables the mixed

check in of international and domestic Passenger and auto segregation of baggage’s at

later stage. By this an airline can check in both international and domestic passenger at

the same counter which eases congestion and increases usability of check in counters.

The project is in the verge of completion and expected to handover by mid of September.

Final testing and commissioning is in progress.

2. GHIAL has been awarded with the prestigious ISO 20000 Certification, which has made

Rajiv Gandhi International Airport the first airport in the country to get this certification.

ISO 20000 is the first international standard for IT Service Management. It ensures

processes to be aligned with the business needs and with the international best practices.

It includes requirements for design, transition, delivery and improvement of services that

fulfil service requirements, and provide value to both internal and external customers. It

takes an integrated approach to plan, establish, implement, operate, monitor and review,

maintain and improve a service management system.

3. GHIAL has filed a petition against Kingfisher Airlines for dishonoured cheques worth Rs

10.3 crore.

4. RGIA has launched ‘Fly via Hyderabad’ programme. The programme was initiated with

an objective to sensitize Tier 2 & 3 cities about the connectivity, comfort & convenience

of choosing Hyderabad as a city and RGIA as an airport to fly over in comparison to

other regional cities. RGIA effort remains in trying to change the way people fly,

offering best services and facilities. RGIA believe in enhancing Regional Connectivity

extensively by Dec 2011 and succeed in making Hyderabad Airport as South & Central

India’s Gateway in next 8 years. Fly via Hyderabad was launched in Pune in August,

2011 and continued in other cities like Mangalore, Madurai, Aurangabad, Trivandrum,

Bhubaneswar, Raipur, and Nagpur. In August’12, the campaign launched in Indore and

Bhopal cities on 21st and 22

nd respectively.

5. GHIAL hosted a special visit for Young Global Leaders (YGL) Community in

coordination with World Economic Forum (WEF) and Indian School of Business (ISB)

at RGIA on 7th August. The YGL Community brings together the world’s most

extraordinary leaders under the age of 40, who together are committed to shape the global

future.

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6. Rajiv Gandhi International Airport will soon begin aircraft MRO services for domestic

and international airlines. The MAS-GMR Aerospace Engineering Company Ltd

(MGAE), a 50:50 JV partnership between GHIAL and Malaysian Aerospace Engineering

Sdn Bhd (MAE) has already signed five customers – GoAir, SpiceJet etc. The MRO

facility is expected to help airlines deploy their aircraft back to operations in the fastest

possible time, since it is located within the SEZ near Hyderabad Airport.

7. Andhra Pradesh Hon’ble Chief Minster Mr. N. Kiran Kumar Reddy along with the Mrs

Sabitha Indira Reddy, Hon’ble Minister for Home-AP, Dr J Geeta Reddy, Hon’ble

Minister for Major Industries-AP and Mr Ganta Srinivasa Rao, Hon’ble Minister for

Infrastructure & Ports-AP paid a visit to Rajiv Gandhi International Airport’s state-of-

the-art MRO facility on 3 August. MAS GMR has signed mid-term and long term

contract with some major airlines like Go Air, Spicejet etc for taking care of their MRO

work.

2.4 Mumbai International Airport Pvt. Ltd.

1. The number of bird hit cases at CSIA has declined. There were 15 cases in 2009, 12 cases

in 2010, 10 cases in 2011 and in this current year, only 6 bird hits have been reported so

far. MIAL uses traditional measures like bursting fire crackers, placing of scare crows

near the runways, regular trimming of grass and maintaining cleanliness near the

perimeter wall of the airport.

2. CSIA has associated with KONE to install the world’s flattest autowalk technology at T2,

which makes designing locations for and installing autowalks considerably easier. The

pit-less travelator was inaugurated on August 3, 2012.

3. MIAL has taken initiative to enhance the Passenger Experience at CSIA. As per the

AVSEC order, in coordination with CISF and Airline operators, departing passengers

holding E-tickets/Web or Kiosk Check-In boarding cards without airline stamp were

honored at security check. This facility is offered by Indigo and Jet Airways, where

Airlines security officials do a cross verification and reconciled such boarding cards by

stamping them either at the boarding gates or at SLPC. This has enhanced the check in

process in turn reducing passenger waiting time at check-in counters. Resulting in rise in

OTP.

4. MIAL Cargo Team has received recognition from Endress & Hauser for its continuous

Quality Service. MIAL Cargo team launched Key Account Manager Program in imports

from the month of Jan 2012. The key objective was to provide quality and timely services

to key customer clients. Cargo team had discussions with DHL- Global logistics and

identified the customer Endress & Hauser (E&H). So far MIAL has handled 254MT of E

& H for both exports and imports together till July2012.

5. CSIA welcomed the first Dream Liner at the airport with Water Canon Shower at

0617hrs on 25th

August 2012. Ethiopian Airline's B787 Dream Liner landed on runways

0927 which is Code F compliant.

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3. AIRLINES

1. Deccan Charters Ltd has launched non-scheduled chartered flight services in Gujarat

under the brand name Deccan Shuttles from August 20 which will initially operate on

Ahmedabad-Surat-Bhavnagar route. The Deccan Charters service aims at connecting the

key economic zones in Gujarat – Ahmedabad, Surat, Jamnagar, Bhavnagar and Kandla –

through 12 daily flights with five 12-seater Grand Caravans. The Ahmedabad - Kandla

route will be made operational from August 27. Deccan Shuttle is planning to expand its

footprint in Tamil Nadu and Karnataka.

2. Air Pegasus, promoted by Shyson Thomas of Decor Aviation, an airport ground-

handling agency, is planning to start regional airline in South India in October 2012 with

a fleet of 3 ATR 72-500 aircrafts.

3. RAHI Aviation Inspired Realties (RAir), an offshoot of RAHI Aviation holdings, a

Bangalore based aviation infrastructure and allied air services company, aims to begin

services 2013.

4. Spirit Air launched operations in end 2009 provides service to Jamshedpur and Ranchi

from Kolkata plans to reach out to tourist destinations such as Gaya and Kushnagar by

the end of 2012.

5. Pawan Hans Helicopter Ltd (PHHL) is planning to connect Delhi with neighbouring

cities through helicopter canb services form the helipad near the Akshardham temple in

east Delhi built during the 2010 Commonwealth Games. The fare structure is yet to be

decided but is expected to be competitive.

3.1 Air India

1. Air India has reinstated 50 out of the 101 pilots who were sacked earlier for taking part in

the pilot strike and has rejected the request of 5 sacked pilots for reinstatement who are

part of the managing committee of the IPG that led the agitation. The remaining pilots,

were interviewed by the three member committee on 25th

August and the results of these

interviews would be known in the next few days. As per the newspaper reports, the

sacked IPG union leaders whose request for reinstatement has been rejected by Air India

are likely to petition the courts against the airline’s decision. On 27th

August, Air India

withdrew its plea for initiation of contempt proceedings against the office-bearers of the

IPG for allegedly obstructing the implementation of its order on training of pilots for the

Boeing 787 Dreamliner aircraft. Air India has suffered a loss of around Rs 600 crore due

to the strike by pilots and plans to resume most of its international operations by the end

of August.

2. CCEA on 3rd

August approved the proposal of MoCA for allowing Air India to take the

delivery of 27 B-787 aircraft after signing the Delay Compensation Settlement

Agreement. The issue relating to compensation for failure to meet performance

guarantees has been delinked from the Delay Compensation Settlement Agreement,

which shall be negotiated separately by an Empowered Group of Officers after actual

evaluation of the performance of the delivered/inducted B-787 aircraft. Ministry of Law

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& Justice has examined and given its nod to the compensation settlement agreement in

the last week of August. Air India will take delivery of 3 Dreamliners in August and the

remaining delivery will be staggered till March 2016. Air India is eligible for an annual

compensation of at least $80,000 per Dreamliner aircraft if performance of planes is

lower than claimed by the manufacturer. Boeing has touted the aircraft’s fuel efficiency

as one of the key performance standards. Air India will evaluate the performance of the

aircraft for the first 18 months and if they don’t meet the promised standards, a separate

compensation package will be negotiated.

3. Air India is planning to sell and leaseback the first B-787’s by which it will gain $15-17

million per plane as the Dreamliner costed $ 98 million and the lessors are quoting $115

million. Under a sale and leaseback arrangement, an airline first buys aircraft, sells it to a

leasing company and then takes the planes back on lease. This gets the assets into an

airline without the aircraft purchase debt in its books.

4. Air India has announced “temporary withdrawal” of its Delhi-Patna-Delhi evening flight

and has also reduced the number of flights between Bangalore and Maldives from 7 to 4

until August 31.

5. Air India recorded 18% growth in passenger revenue during April-June quarter of the

current financial year despite the strike. The airline’s passenger revenue has gone up

form Rs 2,498 crore in the first quarter of 2011-12 to Rs 2,945 crore this financial year.

The international passenger revenue, which amounted to more than the airline’s over

60% of the total passenger revenue last year, grew by mere 2% at Rs 1,610 crore form Rs

1,580 crore in the same quarter last year. The carrier reports a 45% increase in the

domestic passenger revenue at Rs 1,335 crore against Rs 918 crore during Q1 of 2011-

12.

6. Air India is seeking $600 million loan to repay rupee debt, taking advantage of the lowest

dollar borrowing costs in a year to cut its interest bill. The funds will be used to refinance

liabilities that have an annual interest rate of 11.5%. Air India is also planning to raise

$500 million of loans to help pay for 4 B787 planes. According to a tender document, Air

India will repay the bridge loan by selling and leasing back the aircraft. Banks have until

24 August to submit bids. The bridge loan of 6 to 12 months won’t be covered by a

government guarantee. The first two Dreamliners funded by a $195 million loan from

Standard Chartered Plc are scheduled to arrive this month. Air India is likely to get its

next equity infusion of Rs 1,084 crore in September, which will be part of the Rs 6,750

crore infusion announced by the government for the current fiscal.

7. Air India has written to MoCA saying that it has no problem with Jet airways joining Star

Alliance but its case should be considered first. Government has taken up the matter with

Star Alliance officials and has asked them to send the details of conditions that the carrier

has not been able to meet. Star Alliance has decided to not proceed with its membership

as Air India lost its credibility due to the pilot’s strike. Air India also plans to talk with

rival alliances Sky Team and One World for other options and alliances.

8. Air India has grounded some 20 odd planes that are fuel guzzlers and reconfigured 14

planes to have only economy class seats and has decided to utilise its entire fleet of

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Boeing 777 aircraft to fly on international routes that had to be curtailed after its pilots

went on a 59 day strike. Air India may sell 5 long-range Boeing 777-200 aircraft, valued

at $1.4 billion (around Rs 7,700 crore) at current list prices, after it failed to lease the

plans to other airlines.

9. Air India has asked travel technology provider InterGlobe Technologies (IGT) to

investigate its frequent flier data which has been compromised by the creation of fake

accounts. Air India suspects that passengers have been sold tickets through the call centre

by the use of fake frequent flier accounts.

10. Seniority list of 4,457 officers of the non-technical cadre in various departments have

been uploaded on the merged Indian airline and Air India website as per the

recommendations of Dharmadhikari committee.

11. An investigation by Air India’s internal vigilance department found that the airline lost a

staggering Rs 4,234.28 crore between 2005 and 2010 because it leased 16 aircraft to

enhance quality on routes that were already making losses. The investigation findings

were submitted for review by Air India’s Board on November 29, 2011. The leasing

losses accounted for a third of ten airline’s total losses of Rs 13, 835 crore.

12. Air India has suffered losses of over Rs 1,700 crore on its international operations in the

three years from 2009-10.The annual losses were Rs 604 crore, Rs 562 crore and Rs 539

crore respectively in 2011-12, 2010-11 and 2009-10.

13. Air India is reportedly hiring an agency to undertake a marketing research on customer

behaviour pattern which leads to the decision of selecting an airline for travel. The

research is planned to be done on a continuous basis for 2 years, could be extended for

another year. Apart from Mumbai, the study will also include metros such as Delhi,

Chennai, Kolkata, Bangalore and Hyderabad.

14. Air India is planning to carry advertisements on its aircraft and is looking to earn around

Rs 500,000 to Rs 2 million per aircraft per month for an advertisement. Air India hopes

that more than one advertisement would raise the monthly earnings to Rs 4 million per

flight. In addition Air India has also offered to lease out the unused area of Air India

building at Nariman point in Mumbai and is likely to appoint a consultant to prepare a

roadmap for monetising its assets in India and abroad.

15. Air India on 30 August decided to do away with performance-linked incentive (PLI) as

part of pay and wage rationalisation exercise from July 1. However, the airline has

decided to introduce profit or productivity related pay (PRP) in place of PLI for its

employees. PRP would be determined on the achievement of key performance indicators

(KPIs) like yield, aircraft utilisation, passenger load factor, on-time performance and

revenue achievement and it will be only given only after the airline starts making profit.

Government-appointed oversight committee monitoring the implementation of Air

India’s turnaround plan (TAP) has threatened to stop further equity infusion into Air

India if it does not stop productivity-linked incentives (PLI) to its staff. For employees

like pilots and engineers, PLI constitutes around 70% of the salary.

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3.2 Kingfisher Airlines

1. Bankers and aircraft lessors to Kingfisher Airlines have invoked about Rs 835 crore of

corporate guarantees given by United Breweries (Holdings) on behalf of KFA. As on 30th

June, total corporate guarantees to banks and aircraft lessors stood at Rs 8,919.86 crore.

2. According to the news reports, the Income tax (IT) has directed online travel agencies to

remit cash generated out of ticket sales of Kingfisher airlines to the government to

recover its dues.

3. Kingfisher Airlines revenues has nosedived to Rs 301 crore for the quarter ended June

30, 2012 from Rs 1,907 crore during the corresponding quarter last year, while its net

loss burgeoned from Rs 263.64 crore to Rs 650.8 crore, eroding its net worth. The impact

of high fuel cost, high interest rate, depreciation of the rupee and extraordinary expenses

on account of return of aircraft to the lessor and the costs associated with the non-

operating aircraft resulted in a loss after tax of Rs 651 crore. Kingfisher Airlines received

Rs 750 crore from the UB group to ease its cash flow and plans to rope in “several

strategic and financial investors” to infuse fresh capital.

4. Headcount of Kingfisher Airlines is down to 4,200 from 7,700 a year ago. Out of 4,200,

40% are not working as the airline closed at least 20 airport stations as part of downsizing

its operations.

5. Kingfisher Airlines losses widened by a whopping 147% in the last quarter and on 21

August informed DGCA that it had curtailed operations due to the grounding of six of its

17 aircraft fleet and pilots strike. DGCA has allowed Kingfisher Airlines to continue for

now with a truncated flight schedule and a deleted fleet as the Airline is undergoing a

safety audit. The airline currently has a fleet of 11 aircraft – 6 Airbus A320 and 5 turbo-

prop ATR aircraft and has been operating 85 flights since August 17.

3.3 SpiceJet

1. SpiceJet launched its direct flight to Kabul from New Delhi from August 14. SpiceJet

would initially operate flights three days a week on the route serviced by a Boeing 737-

800.

2. SpiceJet is planning to launch a daily flight between Madurai and Colombo from 20

September 2012 with Q400 aircraft. The launch will make SpiceJet the first international

airline to operate from the Southern city. The airline on 23 August announced launch of

two daily flights to Jabalpur form Delhi and Mumbai from September 7. SpiceJet is also

planning to start flights to Guangzhou from Delhi with its Boeing 737 planes and is likely

to be followed with flights from Delhi to Riyadh and Dhaka (Flight to Dhaka yet to be

cleared by MoCA), may be extended to yangoon in Myanmar, depending n government

clearance. SpiceJet is also planning to connect Thiruvananthapuram with Male using

Q400 turboprop aircraft.

3. SpiceJet is stuck with its plans to directly import aviation fuel due to “procedural delays”

and hopes to start imports by the end of this quarter.

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4. SpiceJet has cut plans to increase flights from New Delhi airport as a 4-fold jump in user

fees threatens to make new routes unviable. SpiceJet is operating 4 of its new Q400

turboprops from Delhi as against an earlier plan to fly 7.

5. SpiceJet will provide lifetime free air tickets to all Indian medal winners to honour the

victory of Indian sportspersons in the London Olympics.

3.4 Jet Airways

1. Jet Airways is venturing into the loyalty management business and also plans to set up an

academy to train cabin crew.

2. Jet Airways on 3rd

August reported a profit of Rs 36.4 crore in the April-June quarter

after 5 consecutive loss-making quarters. It had posted a loss of Rs 123.2 crore in Q1 of

last fiscal. Jet reported a 10% increase in Q1 passenger growth and the total revenue of

the group rose 31.4% to Rs 5274.8 crore over the same period last year. The airline cited

depreciating rupee against dollar, escalating jet fuel prices and higher charges at Delhi

airport as the factors that pushed up operational costs. The airline plans to retire around

Rs 2,500 crore of it’s nearly Rs 14,000 crore debt this fiscal. The airline will have to raise

at least Rs 1,100 crore to improve the balance sheet.

3. In order to cut costs and enhance revenue, Jet Airways will focus on phasing out its 220

expatriate pilots to 50 by the end of this year, pulling out form loss-making routes,

renegotiating all contracts with vendors and shoring up ancillary revenue. Jet Airways is

aiming to raise its ancillary revenue by anywhere between $200 million and $300 million

annually as it looks for alternative sources to counter rising operation costs.

4. Jet Airways is reconfiguring its 5 Boeing 777s, adding 36 economy seats in each aircraft,

the aircraft will have 348 seats per aircraft against 312. The move would enable the

airline to increase its capacity without adding planes and help it compete better with

international carriers.

5. Jet Airways is planning to hive off its customer-privilege business into a unit soon.

Customer-privilege business accounts for a quarter of its revenue and handles its

frequent-flyer programme and services like free miles offered to the customers of partner

companies.

6. Jet Airways on August 7th

partnered with HDFC bank to launch ‘JetPrivilege - HDFC

Bank Credit Card’, offering benefits and rewards in the form of JPMiles. The co-branded

credit card will offer enhanced mileage earning opportunities to customers across cities in

India.

7. Jet Airways is launching daily service from Mumbai to Sharjah from October 18 and will

deploy 737-800 aircraft in the routes and offer premiere and economy configurations.

This will be the sixth daily flight to the UAE from Mumbai in addition to the resumption

of its services to Kuwait and Bahrain from Kochi. The airline has four daily services to

Dubai and one daily service to Abu Dhabi.

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8. Jet Airways on 27th

August announced the launch of co-branded credit cards in

association with ICICI Bank. The card, available in three premium variants, is

complimentary to Jet Privilege’s customer loyalty programme.

9. MoCA has approved a strategic alliance between Jet Airways and Deutsche Lufthansa

AG that will enable them to sell seats across each other’s networks. Jet approval covers

the entire Lufthansa network in Europe and North America, and other routes. In return

Lufthansa will be able to book seats on Jet’s domestic flights.

3.5 Indigo

1. IndiGo on 7th

August launched a new daily flight on the Dubai-Hyderabad route and

deployed an Airbus 320 for its first international service from Hyderabad. SpiceJet will

also introduce a second daily flight between Delhi and Dubai.

2. IndiGo surpassed Jet Airways to become the largest carrier in terms of number of

passenger flown in the Indian domestic skies in July. According to the latest figures

released by DGCA, IndiGo with 27.2% market share in July 2012 has edged past Jet

Airways which managed 26.6% share. Market shares of Jet Airways and JetLite were

19.4% and 7.2% respectively.

3. IndiGo launched direct flights daily from Kochi and Chennai to Dubai form August 25.

As an introductory offer, the airlines would be offering return fare of Rs 11,200 n the

new flights in both sectors. IndiGo is also planning to launch direct flights from Kochi to

Muscat and from Thiruvananthapuram to Dubai.

4. IndiGo had just 0.3% of its total flight cancellations between July 2011 to June 2012.The

airline was to operate a total of 1,02,571 flights, of which only 303 were cancelled.

3.6 GoAir

1. GoAir has signed a 10-year contract with Lufthansa Technik for supply and maintenance

of parts for its present and future fleet of 20 Airbus A320 classic and 72 Airbus 320 neo

aircraft.

2. GoAir is planning to double the number of flights to about 1,400 a week as it expands its

network further by adding via or hopping flights on its existing network. The airline

added one A320 to its fleet in August and 7 aircraft are to be delivered by July 2014.

3. GoAir has introduced new flights from Bangalore to Goa and from Lucknow to Delhi

and Mumbai from 21 August.

4. United Technologies Finance has agreed to fund GoAir for making pre-delivery payment

for its 72 A-320 NEO aircraft worth Rs 32,400 crore. United Technologies along with the

engines will provide them with significant amount of funding. Once in place, the airline

will go in for sale and lease back arrangement. The deliveries are expected to start from

2016.

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3.7 International Airlines

1. Lufthansa introduced 4th

generation version of Boeing 747-8 on its Frankfurt-New Delhi

flight on 7th

August making India the first destination in Asia to receive the aircraft and

Delhi the second destination worldwide. The aircarft boasts of lengthened fuselage and

re-designed wings. The aircraft not only enhances comforts in the cabin but also cuts the

cabin noise down by 30%. Delhi Airport welcomed the aircraft with a mid salute by

water cannon.

2. Lufthansa plans to resume flights to Kolkata and Hyderabad as soon as the demand

revives. Lufthansa had dropped Kolkata and Hyderabad routes due to low yield.

3. Virgin Atlantic will be starting a new service connecting flights from Delhi to New

York’s John F. Kennedy (JFK) airport via London’s Heathrow. The new service will

commence from October 28th

. The new service is expected to enhance the airline’s strong

performance to Newark (New Jersey) from Delhi and to capitalise on the growing

passenger numbers to New York and the US.

4. Malaysia Airlines expects 15% growth of passenger load from India in 2012 as compared

to the previous year. The airline plans to increase the number of flight frequencies from

Mumbai, Chennai and Bangalore to Kula Lumpur by another 10 day–time flights

effective September 1. At present airline operates 7 flights per week to Mumbai. The will

provide better travel options for the consumers who can enjoy improved connectivity to

destinations in the airline’s network.

5. Singapore Airlines will increase the flights from Mumbai Airport which at present

operates 19 flights weekly to 21 from October 23.

6. Cathay Pacific on 23 August announced its new service between Hyderabad and Hong

Kong scheduled to take off from December 1. With this Cathay Pacific will be

connecting to 6 cities in India, including Kolkata, which will be connected by its sister

airline Dragonair from November 2012.

7. Thai Smile Airways, the newly formed unit of Thai Airways is launching its maiden

flight from India, connecting Hyderabad with Bangkok from September 16.

8. Air Arabia on 28th

August said it will expand services to New Delhi from 7 to 14 weekly

flights, from Sharjah, UAE. The carrier will offer flights 14 times per week from

September 1.

9. Druk Air, Bhutan’s national carrier will start service to Singapore from Paro via Kolkata.

The twice-a-week service, serving passengers from India as well, starts from September1.

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4. CARGO

1. AAI has stalled the commissioning of Gujarat’s first perishable air-cargo warehouse at

the Sardar Vallabhai Patel International Airport because the state government controlled

agency charged with running the complex, breached norms by roping in a private

enterprise to manage its operations. Construction of the warehouse for perishable air

cargo has been completed and it received Customs clearance recently.

2. Vizag Airport will have a fully equipped cargo terminal by April 2013. Once operational,

the terminal will be able to handle exports of perishable goods, especially marine

products.

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5. AERA APPELLATE TRIBUNAL RENOTIFIED

1. Government of India MoCA vide their Order dated 24

th August 2012 appointed following

persons as the Chairman and Members of the AERAAT as indicated against their names

in addition to their existing charge to the COMPAT with effect from 24th

August 2012

for a period of 2 years.

i. Dr. Justice V.S. Surpurkar – Chairman

ii. Shri Rahul Sarin – Member

iii. Ms. Praveen Tripathi - Member

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6. TRAFFIC

1. FTAs during the Month of July 2012 were 5.25 lakh as compared to FTAs of 5.14 lakh

during the month of July 2011 and 4.67 lakh in July 2010. There has been a growth of 2.1

% in July 2012 over July 2011 as compared to a growthf 10.1 % registered in July 2011

over July 2010. FTAs during the period January-July 2012 were 37.62 lakh with a growth

of 6.6 %, as compared to the FTAs of 35.29 lakh with a growth of 10.7 % during

January-July 2011 over the corresponding period of 2010.

2. FEE during the month of July 2012 were Rs. 8389 crore as compared to Rs. 7116 crore in

July 2011 and Rs. 5444 crore in July 2010. The growth rate in FEE in rupee terms in July

2012 over July 2011 were 17.9 % as compared to 30.7 % in July 2011 over July 2010.

FEE from tourism in rupee terms during January-July 2012 were Rs. 52149 crore with a

growth of 23.3 %, as compared to the FEE of Rs. 42,279 crore with a growth of 14.8%

during January-July 2011 over the corresponding period of 2010.

3. During the month of July 2012, a total number of 941 VoAs were issued under Visa on

Arrival Scheme as compared to 820 VoAs during the month of July 2011, registering a

positive growth of 14.8%. During the period January-July 2012, a total number of 7662

VoAs were issued as compared to 6594 VoAs during corresponding period of 2011

registering a positive growth of 16.2%. The number of VOAs issued under this scheme,

during July 2012 for nationals of the eleven countries were Japan (247), Indonesia (167),

New Zealand (161), Philippines (149), Singapore (129), Finland (63), Vietnam (9),

Myanmar (8), Luxembourg (4) Cambodia (3) and Laos (1). During the period January-

July 2012, the maximum number of VoAs were issued at Delhi airport (4430), followed

by Mumbai (1689), Chennai (1091) and Kolkata (452).

As a facilitative measure to attract more foreign tourists to India, Government launched a

Scheme of “Visa on Arrival” (VoA) from January 2010 for citizens of five countries, viz.

Finland, Japan, Luxembourg, New Zealand and Singapore, visiting India for tourism

purposes. The scheme was extended for the citizens of six more countries, namely

Cambodia, Indonesia, Vietnam, Philippines, Laos and Myanmar from January 2011.

4. According to IATA, India’s domestic air traffic fell by 1.1% in July compared to the

same period last year, the worst performance for any market, reflecting the weakening

economy among other factors. After expanding at 20% plus rates through 2010 and early

2011, the Indian market stopped growing at the end of 2011. In July, capacity rose 2.1%,

dropping the load factor to 69.6% against 71.8% last year. This is against the global

average of domestic passenger growth, which rose by 3.1% year on year.

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5. As per passenger traffic data submitted by various domestic airlines, the number of

passengers carried by them were 354.52 lakhs between January-July 2012 as against

348.47 lakhs during January-July 2011 showing traffic growth of 1.74%. The total

domestic passengers carried by the scheduled domestic airlines for the month of July

2012 were 45.37 lakhs, down 3.84% from 51.08 lakhs in June 2012 and down 9.9% as

from 50.37 lakhs carried last year.

The break-up for the month of July 2012 is as follows:

Air India – 8.24 lakhs, Jet Airways –8.82 lakhs, Jet Lite – 3.25 lakhs, IndiGo – 12.26

lakhs, Spice Jet – 8.08 lakhs, Go Air – 3.16 lakhs, Kingfisher – 1.56 lakhs.

6. Market share of Scheduled Domestic Airlines for the month of July 2012 is as follows:

9.0 8.5

4.2

-0.4 -1.1

China Brazil Japan US India

Growth/Fall in Passengers July data (in %)

348.47

50.37

354.52

45.37

0

50

100

150

200

250

300

350

400

YoY MoM

Pas

sen

ger

Car

rie

d (

in la

khs)

2011 2012 Growth YoY - (+1.74%) MoM - (-9.93%)

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7. Passenger Load Factor of Scheduled Domestic Airlines for the month of July 2012 is as

follows:

8. Asia-Pacific airports witnessed an 8.5% increase in passenger traffic in January to June

2012 compared to the corresponding period in 2011.

Jet Airways, 19.4%

Jet Lite, 7.2%

Kingfisher, 3.4%

Spicejet, 17.8%

GoAir, 7.0%

IndiGo, 27.0%

Air India (Dom), 18.2%

71.3 74.2 79.8

62.2

80.4 76.6

86.5

64.7 67.1 71.7

53

66.3 63.2

75.5

0

10

20

30

40

50

60

70

80

90

100

Air India Jet Airways Jet Lite Kingfisher SpiceJet GoAir IndiGo

Seat

Fac

tor

(%)

Jun-12 Jul-12

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7. SOURCE

1. Airport Economic Regulatory Authority Appellate Tribunal (AERAAT)

http://compat.nic.in/aera.html

2. Ministry of Civil Aviation http://www.civilaviation.gov.in/

3. Press Information Bureau http://pib.nic.in/newsite/mainpage.aspx

4. News Articles published in various newspapers.

5. Bangalore International Airport Limited

6. Cochin International Airport Limited

7. Delhi International Airport Limited

8. GMR Hyderabad International Airport Limited

9. Mumbai International Airport Limited

Association of Private Airport Operators (APAO), 710, 7th Floor, Surya Kiran Building, 19 Kasturba Gandhi Marg, New Delhi, India.

Ph: +91-11-41510916, Fax: +91-11-23329153

Web: www.apaoindia.com, Email: [email protected]

http://compat.nic.in/aera.html

http://www.civilaviation.gov.in/MocaEx/faces/index.html?current=one&_adf.ctrl-state=y1i8y058l_14

http://pib.nic.in/newsite/mainpage.aspx

http://www.apaoindia.com/

mailto:[email protected]

Monthly Newsletter August, 2012 - apaoindia.comIATA International Air Transport Association ......

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