Institutional invest-ors are flocking back to the aviation sector. After mon-ths long futile efforts to raise funds, three leading domestic airlines — Jet Airways, SpiceJet and Kingfisher Airlines have hit the market once again to raise funds.
While SpiceJet is close to raising $100 million, Jet is hoping to raise $150-200 million — all through qualified institutional placement (QIP).
An investment banker familiar with SpiceJet’s move said the airline has almost sewed up the QIP.
Kingfisher is also hoping to raise funds, either through private equity or QIP. It had received shareholders’ nod to raise $100 million.
On December 24, Jet Airways received clearance from the Cabinet Committee on Economic Affairs (CCEA) to raise $400 million from investors through QIP. The proposal was made to the Foreign Investment Promotion Board (FIPB), which referred it to the cabinet.
Jet needed to induce fresh equity to service an estimated long-term debt of Rs 11,500 crore, and short-term debt of Rs 3,500 crore. It reported a loss of Rs 406.7 crore in the second quarter (July-September), up from Rs 384.5 crore loss in the same period last year.
A Mumbai-based investment banker said the aviation sector is slowly beginning to buzz, with the fortunes turning around. “The October-December period has turned out to be an excellent quarter in terms of passenger traffic and occupancy. Some airlines are already talking about enhancing capacities,” he said, adding that there is a marked improvement in the confidence level.
An aviation analyst with domestic brokerage said that Jet Airways is in a better position to raise funds because of its financial condition and reputation among investors. On the flip side, Kingfisher’s parent UB Group has been providing collaterals to raise funds for the airline.
He however said Kingfisher might succeed in raising $100 million, but would come at a high cost. “In case of Jet Airways, it is expected to raise around $150-200 million. Since it is expected to report profit in this quarter on the back of its low-cost service Jet Airways Konnect, it will raise funds at low interest rates.”
Due to the presence of global investor Wilbur Ross in SpiceJet, investors are willing to invest money in the no-frills airline.
SpiceJet is expected report profit by the end of the current financial year on the back of improved occupancy, according to the airline
Source: MyDigitalFC
Thursday, December 31, 2009
Tuesday, December 29, 2009
Airfares may soar 25% in January-2010
Flying in the New Year will be costly. Domestic airlines such as Jet Airways, Air India, Kingfisher Airlines and low-cost carriers are considering raising air fares by up to 25%, in January, encouraged by the recent rise in air travel and a higher passenger load factor.
A few airline companies have already hiked fares on select and profitable routes, according to people connected with the development. “There could be an average 25% hike in fares in the coming weeks across the country,” said a spokesperson for Jet Airways, one of India’s largest air carriers. “There are sectors like Goa where a 40% increase in fares has already been effected,” the spokesperson added.
State-owned national carrier Air India said 90% of the seats in most routes were already booked and the remaining would be sold at a higher price bracket, while the Vijay Mallya-owned Kingfisher Airlines has said it is actively evaluating a possible hike in fares. “We always believe in being competitively priced such that it reflects our service quality and if there are opportunities to improve yields, we would always evaluate the same,” said a Kingfisher Airlines spokesperson.
Post the hike, a Mumbai-Delhi full service carrier air ticket would cost anywhere between Rs 9,000 to Rs 14,000, whereas budget carriers ticket would cost around Rs 8,000, including taxes during non-peak hours. In fact, a few budget carriers have already increased fares. A low-cost carrier ticket for Mumbai-Kolkata sector was available for Rs 4,000 a month back, but it now costs Rs 6,000.
The fare hike is seen linked to improving macro factors as passenger traffic has heightened since the past month. Moreover, with airlines wanting to cash in on the peak season and on the New Year holiday rush, the increase in passenger load for most airlines has been an average 30%. The industry-wide load factor for this quarter is about 75% and in some sectors it has touched 90%.
“Airlines are making double profit these days as fares have gone up and loads are also high,” said Ashwini Kakkar, executive vice chairman of Mercury Travels. “Bookings for the first weekend in January are absolutely full. The last few seats in an airline are sold at Rs 20,000 and above in the metro sectors.” According to Ajay Prakash, general secretary of the Travel Agents Federation of India, “Fares have already been increased in a few sectors and we’re getting indications about another 20% hike. Flights are full and the availability of seats is low.”
Airlines have been eager to raise fares as they have been reeling under huge losses after indulging in aggressive price cuts in the past to attract passengers. Record-high oil prices in 2007 and a plethora of charges levied by airports that were privatised, deeply affected airlines’ profitability. Their woes compounded after passengers switched to the railways, when the slowdown led to fears of job losses.
A senior SpiceJet official said that ticket prices would firm up by 15% compared with last year’s prices in the same period. GoAir and Paramount Airways didn’t respond to ET’s queries. “Many airlines are reporting healthier passenger loads. Business is bouncing back and airlines are beginning to break even,” said Kapil Kaul, CEO, South Asia of Centre for Asia Pacific Aviation, a Singapore-based aviation agency that tracks trends.
Source: Economic Times
A few airline companies have already hiked fares on select and profitable routes, according to people connected with the development. “There could be an average 25% hike in fares in the coming weeks across the country,” said a spokesperson for Jet Airways, one of India’s largest air carriers. “There are sectors like Goa where a 40% increase in fares has already been effected,” the spokesperson added.
State-owned national carrier Air India said 90% of the seats in most routes were already booked and the remaining would be sold at a higher price bracket, while the Vijay Mallya-owned Kingfisher Airlines has said it is actively evaluating a possible hike in fares. “We always believe in being competitively priced such that it reflects our service quality and if there are opportunities to improve yields, we would always evaluate the same,” said a Kingfisher Airlines spokesperson.
Post the hike, a Mumbai-Delhi full service carrier air ticket would cost anywhere between Rs 9,000 to Rs 14,000, whereas budget carriers ticket would cost around Rs 8,000, including taxes during non-peak hours. In fact, a few budget carriers have already increased fares. A low-cost carrier ticket for Mumbai-Kolkata sector was available for Rs 4,000 a month back, but it now costs Rs 6,000.
The fare hike is seen linked to improving macro factors as passenger traffic has heightened since the past month. Moreover, with airlines wanting to cash in on the peak season and on the New Year holiday rush, the increase in passenger load for most airlines has been an average 30%. The industry-wide load factor for this quarter is about 75% and in some sectors it has touched 90%.
“Airlines are making double profit these days as fares have gone up and loads are also high,” said Ashwini Kakkar, executive vice chairman of Mercury Travels. “Bookings for the first weekend in January are absolutely full. The last few seats in an airline are sold at Rs 20,000 and above in the metro sectors.” According to Ajay Prakash, general secretary of the Travel Agents Federation of India, “Fares have already been increased in a few sectors and we’re getting indications about another 20% hike. Flights are full and the availability of seats is low.”
Airlines have been eager to raise fares as they have been reeling under huge losses after indulging in aggressive price cuts in the past to attract passengers. Record-high oil prices in 2007 and a plethora of charges levied by airports that were privatised, deeply affected airlines’ profitability. Their woes compounded after passengers switched to the railways, when the slowdown led to fears of job losses.
A senior SpiceJet official said that ticket prices would firm up by 15% compared with last year’s prices in the same period. GoAir and Paramount Airways didn’t respond to ET’s queries. “Many airlines are reporting healthier passenger loads. Business is bouncing back and airlines are beginning to break even,” said Kapil Kaul, CEO, South Asia of Centre for Asia Pacific Aviation, a Singapore-based aviation agency that tracks trends.
Source: Economic Times
Monday, December 28, 2009
Air India plane hit by stone, Jet blast to blame
IGI Airport's taxiways seem as dangerous for aircraft as Delhi's roads are for its motorists. On Sunday evening, an Air India A-321 aircraft was damaged when, during a jet blast from a Jet Airways flight in front of it, a 'foreign object' from the ground hit its windshield. The flight, carrying 162 passengers, had to return to the parking bay where passengers were made to board another aircraft.
The flight — Delhi-Mumbai IC 683 — was in line for take-off at the taxiing bay around 5pm when the pilot of Jet Airways flight 9W 334 from Delhi to Mumbai applied throttle. The ensuing blast from the engine was so powerful that some foreign material, stones and dust flung onto and cracked the windshield of the Air India aircraft.
"With the aircraft damaged, there was no way we could have operated it. It was turned back to the bay and passengers were made to disembark. Later, we arranged for another aircraft which flew the passengers to Mumbai. Instead of its scheduled departure at 5pm, the flight finally took off at 7.30pm," said an Air India official.
According to sources, the taxiway where the incident occurred was cluttered with small stones and other construction material due to ongoing work at taxiway Echo.
While Jet Airways did not officially comment on the issue, sources said the maintenance of the airside was in a highly poor condition and the accident could have been avoided had the taxiway been clear.
"It is only providence that an aircraft got damaged in the blast. Had the stone that damaged the windshield hit a person, it would surely have been fatal. Such instances have also happened in the past where not just stones but trolleys and ladders have flung around during jet blasts. The airport manager must ensure that the airside is absolutely sanitised and all care is maintained," said sources.
Delhi International Airport (P) Ltd (DIAL) officials did comment on the condition of the runway though they did confirm that the accident had taken place, even though their version was at variance with that of Air India's.
"Prima facie, it appears that a departing Jet Airways aircraft increased thrust while taxiing out, resulting in a jet blast that caused damage to the door of an Air India aircraft parked on the adjacent bay. The matter has been referred to DGCA which will be investigating the incident," said a spokesperson.
Source: Times of India
The flight — Delhi-Mumbai IC 683 — was in line for take-off at the taxiing bay around 5pm when the pilot of Jet Airways flight 9W 334 from Delhi to Mumbai applied throttle. The ensuing blast from the engine was so powerful that some foreign material, stones and dust flung onto and cracked the windshield of the Air India aircraft.
"With the aircraft damaged, there was no way we could have operated it. It was turned back to the bay and passengers were made to disembark. Later, we arranged for another aircraft which flew the passengers to Mumbai. Instead of its scheduled departure at 5pm, the flight finally took off at 7.30pm," said an Air India official.
According to sources, the taxiway where the incident occurred was cluttered with small stones and other construction material due to ongoing work at taxiway Echo.
While Jet Airways did not officially comment on the issue, sources said the maintenance of the airside was in a highly poor condition and the accident could have been avoided had the taxiway been clear.
"It is only providence that an aircraft got damaged in the blast. Had the stone that damaged the windshield hit a person, it would surely have been fatal. Such instances have also happened in the past where not just stones but trolleys and ladders have flung around during jet blasts. The airport manager must ensure that the airside is absolutely sanitised and all care is maintained," said sources.
Delhi International Airport (P) Ltd (DIAL) officials did comment on the condition of the runway though they did confirm that the accident had taken place, even though their version was at variance with that of Air India's.
"Prima facie, it appears that a departing Jet Airways aircraft increased thrust while taxiing out, resulting in a jet blast that caused damage to the door of an Air India aircraft parked on the adjacent bay. The matter has been referred to DGCA which will be investigating the incident," said a spokesperson.
Source: Times of India
Thursday, December 24, 2009
Indian airlines to return to profit: Report
India's private airlines can look forward to a return to profit in the next financial year after two turbulent years of losses, an industry report forecast Thursday.
With the economy rebounding, private carriers are expected to post a total profit of 250 million dollars to 300 million dollars in the next fiscal year starting in April, the Centre for Asia Pacific Aviation said in a report.
The carriers include Jet Airways, SpiceJet, Kingfisher Airlines Ltd. and Indigo Airlines.
"After a turbulent couple of years, 2010 should be a more positive year for Indian aviation, provided that the airlines can remain disciplined on costs, capacity and pricing," the aviation consultancy said.
But state-run flagship carrier Air India will remain in the red next year, the Sydney-based consultancy said, dragged down by high operational costs and a fall in passengers.
"Air India will continue to have cash deficits for the next five to seven years, which could cumulatively amount to four-to-five billion dollars, the report said.
Total airline losses for the current fiscal year are expected to total 1.5 to 1.6 billion dollars of which Air India will account for at least half, Kapil Kaul, chief executive in India for the Singapore-based Centre for Asia-Pacific Aviation, told AFP.
The combined losses have narrowed from last year's two billion dollars.
After the government opened India's skies to more competition in 2004, a clutch of new airlines took flight amid predictions of double-digit passenger growth.
But costlier fuel pushed up fares, sending many passengers back to trains. The sector was also hit by a slowing economy, which further reduced travel, and created overcapacity and fierce price wars.
"Domestic traffic is expected to post an expansion of 15 percent or more in 2010-11 as the industry returns to its long-term growth trajectory," the report said.
International traffic growth is expected to grow by 10 to 12 percent, it added.
Source: Economic Times
With the economy rebounding, private carriers are expected to post a total profit of 250 million dollars to 300 million dollars in the next fiscal year starting in April, the Centre for Asia Pacific Aviation said in a report.
The carriers include Jet Airways, SpiceJet, Kingfisher Airlines Ltd. and Indigo Airlines.
"After a turbulent couple of years, 2010 should be a more positive year for Indian aviation, provided that the airlines can remain disciplined on costs, capacity and pricing," the aviation consultancy said.
But state-run flagship carrier Air India will remain in the red next year, the Sydney-based consultancy said, dragged down by high operational costs and a fall in passengers.
"Air India will continue to have cash deficits for the next five to seven years, which could cumulatively amount to four-to-five billion dollars, the report said.
Total airline losses for the current fiscal year are expected to total 1.5 to 1.6 billion dollars of which Air India will account for at least half, Kapil Kaul, chief executive in India for the Singapore-based Centre for Asia-Pacific Aviation, told AFP.
The combined losses have narrowed from last year's two billion dollars.
After the government opened India's skies to more competition in 2004, a clutch of new airlines took flight amid predictions of double-digit passenger growth.
But costlier fuel pushed up fares, sending many passengers back to trains. The sector was also hit by a slowing economy, which further reduced travel, and created overcapacity and fierce price wars.
"Domestic traffic is expected to post an expansion of 15 percent or more in 2010-11 as the industry returns to its long-term growth trajectory," the report said.
International traffic growth is expected to grow by 10 to 12 percent, it added.
Source: Economic Times
Tuesday, December 22, 2009
Aviation sector in cruise mode, traffic rises 25% during Oct-Nov
The aviation industry is headed towards its busiest three months ever with the number of passengers jumping over 25% during October-November 2009 over the year-ago period, indicating clear revival in demand for air traffic. Airlines’ executives said that while flights to metro cities saw a surge in passenger traffic, leisure travel to destinations in Goa and Kerala came as an added bonus.
As per the data available with the Directorate General of Civil Aviation (DGCA), in November an estimated 40 lakh passengers travelled compared with 30.48 lakh in the same month last year. In October 2009, too, 40 lakh passengers had travelled on airlines compared with 32 lakh passenger in the year-ago period.
This has lifted the overall passenger traffic, which has been lagging since 2008. During January-November 2009, 400 lakh passengers travelled, an increase of 5.45% over same period 2008. Airline companies said the sharp pick-up in air traffic over the past two months is due to increase in both business and leisure travel, and would allow them to improve their financial performance, as fuel cost has not swung too sharply during the past one quarter.
Ankur Bhatia, managing director of an IT company that provides distribution solutions to travel firms, Amadeus India, said: “Our statistics indicate that December alone would see an increase of 40% over December last year in terms of airline ticket sales and passenger traffic.”
This should bring some cheer to airline operators, who have been laden with losses, as falling demand due to the economic slowdown and rise in fuel cost over the past few years cut into margins. Sanjay Aggarwal, CEO, SpiceJet, said October and November this year were even bigger than the two months in 2007 when the economy was still growing at a fast clip.
“Compared with 2007, passenger traffic is up 6-7%. Last year, it was pretty depressed due to the economic slowdown and thereafter, the terror attacks in Mumbai. This quarter is going to be the best quarter for the aviation industry in terms of demand,” he said.
Mr Aggarwal added that if fuel prices remain stable and there are no sharp swing in currency exchange rates, SpiceJet may post profits for the fiscal ending March 2010. The spokesperson for another low-cost airline GoAir said: “It seems to be the best quarter the aviation industry has witnessed in a long time. The demand for October-December has been good and we are now looking forward to the January-March quarter 2010.”
Source: The Economic Times
As per the data available with the Directorate General of Civil Aviation (DGCA), in November an estimated 40 lakh passengers travelled compared with 30.48 lakh in the same month last year. In October 2009, too, 40 lakh passengers had travelled on airlines compared with 32 lakh passenger in the year-ago period.
This has lifted the overall passenger traffic, which has been lagging since 2008. During January-November 2009, 400 lakh passengers travelled, an increase of 5.45% over same period 2008. Airline companies said the sharp pick-up in air traffic over the past two months is due to increase in both business and leisure travel, and would allow them to improve their financial performance, as fuel cost has not swung too sharply during the past one quarter.
Ankur Bhatia, managing director of an IT company that provides distribution solutions to travel firms, Amadeus India, said: “Our statistics indicate that December alone would see an increase of 40% over December last year in terms of airline ticket sales and passenger traffic.”
This should bring some cheer to airline operators, who have been laden with losses, as falling demand due to the economic slowdown and rise in fuel cost over the past few years cut into margins. Sanjay Aggarwal, CEO, SpiceJet, said October and November this year were even bigger than the two months in 2007 when the economy was still growing at a fast clip.
“Compared with 2007, passenger traffic is up 6-7%. Last year, it was pretty depressed due to the economic slowdown and thereafter, the terror attacks in Mumbai. This quarter is going to be the best quarter for the aviation industry in terms of demand,” he said.
Mr Aggarwal added that if fuel prices remain stable and there are no sharp swing in currency exchange rates, SpiceJet may post profits for the fiscal ending March 2010. The spokesperson for another low-cost airline GoAir said: “It seems to be the best quarter the aviation industry has witnessed in a long time. The demand for October-December has been good and we are now looking forward to the January-March quarter 2010.”
Source: The Economic Times
Monday, December 21, 2009
Flights delayed due to poor visibility
Poor visibility and a defunct Instrument Landing System (ILS) resulted in flight delays at the Chandigarh airport on Sunday as well. Some of the morning flights from Chandigarh were delayed due to poor visibility.
The Kingfisher Airlines flight for Delhi was delayed by almost 40 minutes. It departed at 4:20 pm against its scheduled departure of 3:40 pm. Also, the flight to Jammu was delayed by one and a half hour. It departed around 11:05 am against its scheduled departure of 9:35 am. This is a halt flight for Delhi which goes to Jammu and Srinagar.
Similarly, the Jet Airways flight for Mumbai was delayed by an hour. Also, the Jet flight for Delhi departed at 11:55 am against its departure time of 10:35 am. The other flights including Go-Air and Indian Airlines were running as per schedule.
Source: Indian Express
The Kingfisher Airlines flight for Delhi was delayed by almost 40 minutes. It departed at 4:20 pm against its scheduled departure of 3:40 pm. Also, the flight to Jammu was delayed by one and a half hour. It departed around 11:05 am against its scheduled departure of 9:35 am. This is a halt flight for Delhi which goes to Jammu and Srinagar.
Similarly, the Jet Airways flight for Mumbai was delayed by an hour. Also, the Jet flight for Delhi departed at 11:55 am against its departure time of 10:35 am. The other flights including Go-Air and Indian Airlines were running as per schedule.
Source: Indian Express
Thursday, December 17, 2009
Singapore Airlines To Make Capacity Adjustments
Singapore Airlines is to make changes to its route network in the coming months that will include frequency increases on several routes. The changes will also include the suspension of operations to Pakistan as well as Nanjing in China.
Changes will begin to be seen from this month, when Singapore-Moscow-Houston flight frequency will increase to five per week from four, effective 18 December.
From 19 January 2010, non-stop Singapore-Newark flights will return to daily operations from the current five-times-weekly.
As already announced, Munich will be a new destination in the SIA network from the start of the northern summer schedule late in March 2010. Flights will operate five times per week on a Singapore-Munich-Manchester routing. Manchester services will be increased to five-times-weekly from thrice-weekly as a result.
Also from the start of the summer season in 2010, Colombo and Dhaka will each be served daily, up from five flights per week.
Frequency of Mumbai-Singapore and Delhi-Singapore Flights will meanwhile be increased from March and June 2010, respectively. Flights will be operated twice-daily to both Indian cities, up from the existing 11-times-weekly.
Services to Seoul will also increase from June 2010, to 18-times-weekly from 14-times-weekly. One of the daily flights carries on to San Francisco.
In addition, as previously announced SIA will begin serving Tokyo Haneda airport with two daily flights from the end of October 2010, complementing the existing twice-daily flights to Tokyo Narita, one of which continues on to Los Angeles.
The difficult decision has meanwhile been taken to suspend twice-weekly operations to Pakistan and Nanjing. The last Singapore-Karachi-Lahore service will be operated on 17 February 2010 while the last Singapore-Nanjing service will be operated on 26 March 2010. These suspensions are regrettable but are necessary as a result of the performance of the two routes. SIA will be assisting affected customers in making alternative travel arrangements.
Frequency will also be reduced in other areas of the network. From January 2010, Ho Chi Minh City will be served 14 times per week instead of 18 times while Kuala Lumpur will be served 17 times per week rather than 24. However overall SIA Group flight frequency on the Singapore-Kuala Lumpur route will remain unchanged at 54 per week as SilkAir will be taking over the operation of one of SIA’s daily services.
Positive signs of a recovery in demand continue to be seen but operating conditions remain challenging and yields in particular remain under pressure. SIA will continue to carefully match capacity to demand across the network and customers will be informed at the earliest opportunity where changes are made.
Source: The Financial
Changes will begin to be seen from this month, when Singapore-Moscow-Houston flight frequency will increase to five per week from four, effective 18 December.
From 19 January 2010, non-stop Singapore-Newark flights will return to daily operations from the current five-times-weekly.
As already announced, Munich will be a new destination in the SIA network from the start of the northern summer schedule late in March 2010. Flights will operate five times per week on a Singapore-Munich-Manchester routing. Manchester services will be increased to five-times-weekly from thrice-weekly as a result.
Also from the start of the summer season in 2010, Colombo and Dhaka will each be served daily, up from five flights per week.
Frequency of Mumbai-Singapore and Delhi-Singapore Flights will meanwhile be increased from March and June 2010, respectively. Flights will be operated twice-daily to both Indian cities, up from the existing 11-times-weekly.
Services to Seoul will also increase from June 2010, to 18-times-weekly from 14-times-weekly. One of the daily flights carries on to San Francisco.
In addition, as previously announced SIA will begin serving Tokyo Haneda airport with two daily flights from the end of October 2010, complementing the existing twice-daily flights to Tokyo Narita, one of which continues on to Los Angeles.
The difficult decision has meanwhile been taken to suspend twice-weekly operations to Pakistan and Nanjing. The last Singapore-Karachi-Lahore service will be operated on 17 February 2010 while the last Singapore-Nanjing service will be operated on 26 March 2010. These suspensions are regrettable but are necessary as a result of the performance of the two routes. SIA will be assisting affected customers in making alternative travel arrangements.
Frequency will also be reduced in other areas of the network. From January 2010, Ho Chi Minh City will be served 14 times per week instead of 18 times while Kuala Lumpur will be served 17 times per week rather than 24. However overall SIA Group flight frequency on the Singapore-Kuala Lumpur route will remain unchanged at 54 per week as SilkAir will be taking over the operation of one of SIA’s daily services.
Positive signs of a recovery in demand continue to be seen but operating conditions remain challenging and yields in particular remain under pressure. SIA will continue to carefully match capacity to demand across the network and customers will be informed at the earliest opportunity where changes are made.
Source: The Financial
Thursday, December 10, 2009
Emirates announces flights to Amsterdam
Emirates is to launch flights from it’s Dubai hub to Amsterdam from May 1, 2010. The airline is also promising further new route announcements in the coming months. The daily, non- stop service from Dubai will be operated with a combination of 777- 200LR and 777- 300ER aircraft. Emirates, with its Private Suites, will be the only airline offering First Class accommodation on the route. The flight will leave Dubai each day at 0825 hrs and arrive in Amsterdam at 1330 hrs. From Amsterdam, the plane departs at 1530 hrs and arrives in Dubai at 2359 hrs.
Source: Mail Today
Source: Mail Today
Wednesday, December 9, 2009
Jet’s November passenger traffic up by 33%
With a slew of restructuring measures paying off and the economy rebounding, Jet Airways has reported a 33 per cent increase in its domestic passenger traffic for the month of November 2009, as compared to the same period last year.
The airlines’ international passenger traffic has also registered a growth of 19 per cent on a seat factor of 81.9 per cent in November 2009, the airline said.
JetLite, the wholly owned subsidiary of Jet Airways has also done well in increasing its passenger traffic by 22 per cent and a seat factor of 76.7 per cent in the month of November 2009.
“Our improved performance in November 2009 is largely due rise in domestic and international travel following the recovery in the economy and a series of restructuring exercise undertaken recently,” Nikos Kardassis, CEO, Jet Airways told Hindustan Times.
“We have also seen rise in the yields. For December and January we have seen encouraging bookings and expect these months to be better than November,” he said.
In a bid to create a larger customer base and offer enhanced services to its international and domestic travelers, Jet Airways plans to develop Delhi and Mumbai as major hubs to international destinations.
Source: Hindustan Times
The airlines’ international passenger traffic has also registered a growth of 19 per cent on a seat factor of 81.9 per cent in November 2009, the airline said.
JetLite, the wholly owned subsidiary of Jet Airways has also done well in increasing its passenger traffic by 22 per cent and a seat factor of 76.7 per cent in the month of November 2009.
“Our improved performance in November 2009 is largely due rise in domestic and international travel following the recovery in the economy and a series of restructuring exercise undertaken recently,” Nikos Kardassis, CEO, Jet Airways told Hindustan Times.
“We have also seen rise in the yields. For December and January we have seen encouraging bookings and expect these months to be better than November,” he said.
In a bid to create a larger customer base and offer enhanced services to its international and domestic travelers, Jet Airways plans to develop Delhi and Mumbai as major hubs to international destinations.
Source: Hindustan Times
Tuesday, December 8, 2009
Paramount hopes to be back in air today
The Chennai-based Paramount Airways is hopeful of operating all its scheduled flights from Tuesday.
High Court Order
The airline late on Monday issued a statement that the Delhi High Court had given a “favourable” order against the decision of the Directorate-General of Civil Aviation (DGCA) to de-register three of the airlines' five aircraft. “The Court has asked DGCA to set aside the de-registration immediately and allow resumption of flights using the three de-registered aircraft,” the statement adds.
3 planes deregistered
Last Friday, the DGCA had de-registered three aircraft that forced the airline to cancel a number of flights. The decision to de-register the aircraft was taken after GECAS, the lessor of the aircraft, claimed that the airline had defaulted on payment of lease charges.
$15-m deposit
The Paramount statement, which states that the airline had earlier received a favourable verdict in the London High Court, adds that it had paid a $15-million deposit to GECAS.
Bookings hit
Soon after the aircraft were de-registered the airline stopped accepting bookings for a number of sectors including Bangalore, Visakhapatnam and Coimbatore. The airline, which took to the skies in October 2005, flies to 16 destinations across the country and operates 72 daily flights..
Till late Monday evening there was no response from the authorities about when the airlines' aircraft would be re-registered and allowed to begin normal operations.
Source: The Hindu Business Line
High Court Order
The airline late on Monday issued a statement that the Delhi High Court had given a “favourable” order against the decision of the Directorate-General of Civil Aviation (DGCA) to de-register three of the airlines' five aircraft. “The Court has asked DGCA to set aside the de-registration immediately and allow resumption of flights using the three de-registered aircraft,” the statement adds.
3 planes deregistered
Last Friday, the DGCA had de-registered three aircraft that forced the airline to cancel a number of flights. The decision to de-register the aircraft was taken after GECAS, the lessor of the aircraft, claimed that the airline had defaulted on payment of lease charges.
$15-m deposit
The Paramount statement, which states that the airline had earlier received a favourable verdict in the London High Court, adds that it had paid a $15-million deposit to GECAS.
Bookings hit
Soon after the aircraft were de-registered the airline stopped accepting bookings for a number of sectors including Bangalore, Visakhapatnam and Coimbatore. The airline, which took to the skies in October 2005, flies to 16 destinations across the country and operates 72 daily flights..
Till late Monday evening there was no response from the authorities about when the airlines' aircraft would be re-registered and allowed to begin normal operations.
Source: The Hindu Business Line
Monday, December 7, 2009
Low-cost domestic carriers raise airfares on busy routes
Crippled by financial setbacks and a dip in revenues, domestic air carriers have more than doubled the fares on select metro routes ahead of a long festive season, as compared to the fares four months ago. While a Delhi-Mumbai one-way ticket priced at the lowest fare cost around Rs 2,300 in August this year, it has more than doubled to Rs 4,900 now, if booked 10 days in advance.
All the five low-cost carriers — Go Air, Indigo, SpiceJet, JetLite (erstwhile Air Sahara), Kingfisher Red (erstwhile Air Deccan) — are charging upwards of Rs 4,500 one-way to connect any two of the four major metro cities. Flyers will have to shell out around Rs 5,700 as one-way fare from Delhi to Bangalore, which used to cost around Rs 2,500 four months ago. Similarly, the Delhi-Chennai one-way fare totals to around Rs 5,400 now as compared to Rs 2,900 four months ago.
Aviation experts say that the recent hike could be explained by multiple factors which have affected the airline industry. “Airlines have posted significant losses recently; now they are trying to maximise the recoveries by hiking fares on metro routes that have high load factors,” said Kapil Arora, partner (advisory services), Ernst and Young Pvt Ltd. The pricing that was adopted by domestic carriers till a few months ago, said Arora, was highly irrational and was even below cost. “Airlines have started pricing rationally in select sectors to bring closer the break-even point,” he added. In the second quarter of 2009-10, the balance sheet of all listed airlines was splattered with red. Vijay Mallya-promoted Kingfisher Airlines posted a loss of Rs 419 crore, Jet Airways suffered a loss of Rs 409 crore and low-cost carrier SpiceJet incurred a loss of Rs 101 crore in Q2 2009-10.
Source: The Indian Express
All the five low-cost carriers — Go Air, Indigo, SpiceJet, JetLite (erstwhile Air Sahara), Kingfisher Red (erstwhile Air Deccan) — are charging upwards of Rs 4,500 one-way to connect any two of the four major metro cities. Flyers will have to shell out around Rs 5,700 as one-way fare from Delhi to Bangalore, which used to cost around Rs 2,500 four months ago. Similarly, the Delhi-Chennai one-way fare totals to around Rs 5,400 now as compared to Rs 2,900 four months ago.
Aviation experts say that the recent hike could be explained by multiple factors which have affected the airline industry. “Airlines have posted significant losses recently; now they are trying to maximise the recoveries by hiking fares on metro routes that have high load factors,” said Kapil Arora, partner (advisory services), Ernst and Young Pvt Ltd. The pricing that was adopted by domestic carriers till a few months ago, said Arora, was highly irrational and was even below cost. “Airlines have started pricing rationally in select sectors to bring closer the break-even point,” he added. In the second quarter of 2009-10, the balance sheet of all listed airlines was splattered with red. Vijay Mallya-promoted Kingfisher Airlines posted a loss of Rs 419 crore, Jet Airways suffered a loss of Rs 409 crore and low-cost carrier SpiceJet incurred a loss of Rs 101 crore in Q2 2009-10.
Source: The Indian Express
Friday, December 4, 2009
British Airways to compensate buyers of $40 US-India tickets
British Airways flightBritish Airways will compensate 2,200 people who had bought the $40 tickets between the United States and India on October 2 after the carrier had mistakenly posted the wrong fare on its website.
The airline had cancelled the bookings and offered all affected passengers a travel voucher of $300.
An official statement said British Airways, in an agreement with the US department of transportations aviation enforcement office will compensate consumers for cancellation penalties and other expenses incurred due to the carriers erroneous offer of $40 fare between the US and India.
"This agreement with British Airways will compensate passengers for losses they suffered as a result of the carriers mistaken fare offer," transportation secretary Ray LaHood said.
The lowest US-India fare being offered by British Airways prior to the mistaken ad, not including taxes, was over $750.
The $40 fare, which did not includes taxes and fees, was posted on British Airways own website at about 6.30 pm on October 2.
The carrier realised its error and removed the fare within minutes from its own website, but it remained on the websites of certain on-line travel agents for about two hours. During this time, more than 1,200 bookings were made covering approximately 2,200 passengers.
In consultation with the Aviation Enforcement Office, British Airways has now agreed to reimburse passengers for their expenses resulting from having relied on the erroneous $40 fare.
"These could include fees for cancelling flights or cancelling hotels, rental cars or other ground arrangements, as well as additional costs incurred in rebooking flights due to fare increases on previously held flights that were cancelled in order to book the $40 fare," the statement said. British Airways has also apologised to its customers who booked the $40 tickets.
Source: Rediff Business
The airline had cancelled the bookings and offered all affected passengers a travel voucher of $300.
An official statement said British Airways, in an agreement with the US department of transportations aviation enforcement office will compensate consumers for cancellation penalties and other expenses incurred due to the carriers erroneous offer of $40 fare between the US and India.
"This agreement with British Airways will compensate passengers for losses they suffered as a result of the carriers mistaken fare offer," transportation secretary Ray LaHood said.
The lowest US-India fare being offered by British Airways prior to the mistaken ad, not including taxes, was over $750.
The $40 fare, which did not includes taxes and fees, was posted on British Airways own website at about 6.30 pm on October 2.
The carrier realised its error and removed the fare within minutes from its own website, but it remained on the websites of certain on-line travel agents for about two hours. During this time, more than 1,200 bookings were made covering approximately 2,200 passengers.
In consultation with the Aviation Enforcement Office, British Airways has now agreed to reimburse passengers for their expenses resulting from having relied on the erroneous $40 fare.
"These could include fees for cancelling flights or cancelling hotels, rental cars or other ground arrangements, as well as additional costs incurred in rebooking flights due to fare increases on previously held flights that were cancelled in order to book the $40 fare," the statement said. British Airways has also apologised to its customers who booked the $40 tickets.
Source: Rediff Business
Wednesday, December 2, 2009
Airlines are flying in a 'comfort zone'
After flying low in the initial months of this year, airlines are gradually gaining altitude as yield -- or net revenue per seat -- and demand situation improve.
This trend is reflected in the International Air Transport Association's (IATA) Airlines Financial Monitor for October-November published on Tuesday, which said in the third quarter -- July-September -- 75 major airlines turned a loss of $3.4 billion in the same quarter last year into a profit of $0.7 billion.
However, despite improved financial performance of some carriers over last year, the Geneva-based air transport body has maintained its earlier forecast for an industry of $11 billion this year.
The domestic airline industry is also upbeat about the improving market condition and expecting the next two quarters to be better than last year's.
Samyukth Sridharan, chief commercial officer (CCO) of SpiceJet Ltd, said going by the environment in the last four months, the industry was optimistic about coming months too.
"If you look at the past four months, demand is back and that there is no reason to think otherwise. "The past few months have been encouraging and we can be optimistic about the same (financial performance in the next two quarters)," he said.
M Thiagarajan, managing director of Paramount Airways, said most local carriers have performed better in the last two quarters of this year compared to the same quarters last years.And he believes they would be able maintain the good numbers in the coming two quarters too with prevailing favourable market conditions.
"All (local) Airlines are flying in the comfort zone. Last year during this time, jet fuel prices were around $140 per barrel, which was way above today's $80-85 per barrel. I don't think it will climb to last year's peak level. I expect the impact of the winter demand in the US and Europe on the aviation turbine fuel (ATF) prices to be counter balanced by the economic trouble in the Middle East," said the owner of Chennai-based all-business airline.
Thiagarajan feels a stronger rupee against US dollar is also beneficial for the airlines, whose 60% of the operational costs - lease rentals, salaries of expat pilots, aircraft maintenance, spare parts and others -- are denominated in the US currency.
But what will really push airlines into the profit zone, he said, would be the improving yields and passenger load factor (PLF), both of which were headed north.
"I see gradual improvement in yields. I would say fares are moving in the right direction and will slowly increase by 20-25% from the current levels in the coming few months. The industry needs to get to these levels of fares for sustainable profitability," he said.
Thiagarajan's airline and budget carrier IndiGo Airlines were the only domestic carriers which reported profits last fiscal. As per Centre for Asia Pacific Aviation, Indian airlines lost around Rs 9,000 crore ($2 billion) last year as demand slipped and oil prices soared in an industry plagued with overcapacity.
But last year's trend has completely reversed this year with not just the demand picking up but even the yields improving.A senior executive with low cost airline GoAir said that all travel segments - leisure and business - were doing well this year.
"This (jump in business and leisure travel), combined with higher fares promise to take us towards better financial numbers," he said.
An analyst with a local broking firm predicted that most airlines will see a surge in yields and PLF in the December quarter. Jitendra Bhargava, executive director of Air India, was less optimistic than his peers. "PLF has certainly improved but fares and yields are still low, making it very hard for us to make money," he said.
Source: Daily News & Analysis
This trend is reflected in the International Air Transport Association's (IATA) Airlines Financial Monitor for October-November published on Tuesday, which said in the third quarter -- July-September -- 75 major airlines turned a loss of $3.4 billion in the same quarter last year into a profit of $0.7 billion.
However, despite improved financial performance of some carriers over last year, the Geneva-based air transport body has maintained its earlier forecast for an industry of $11 billion this year.
The domestic airline industry is also upbeat about the improving market condition and expecting the next two quarters to be better than last year's.
Samyukth Sridharan, chief commercial officer (CCO) of SpiceJet Ltd, said going by the environment in the last four months, the industry was optimistic about coming months too.
"If you look at the past four months, demand is back and that there is no reason to think otherwise. "The past few months have been encouraging and we can be optimistic about the same (financial performance in the next two quarters)," he said.
M Thiagarajan, managing director of Paramount Airways, said most local carriers have performed better in the last two quarters of this year compared to the same quarters last years.And he believes they would be able maintain the good numbers in the coming two quarters too with prevailing favourable market conditions.
"All (local) Airlines are flying in the comfort zone. Last year during this time, jet fuel prices were around $140 per barrel, which was way above today's $80-85 per barrel. I don't think it will climb to last year's peak level. I expect the impact of the winter demand in the US and Europe on the aviation turbine fuel (ATF) prices to be counter balanced by the economic trouble in the Middle East," said the owner of Chennai-based all-business airline.
Thiagarajan feels a stronger rupee against US dollar is also beneficial for the airlines, whose 60% of the operational costs - lease rentals, salaries of expat pilots, aircraft maintenance, spare parts and others -- are denominated in the US currency.
But what will really push airlines into the profit zone, he said, would be the improving yields and passenger load factor (PLF), both of which were headed north.
"I see gradual improvement in yields. I would say fares are moving in the right direction and will slowly increase by 20-25% from the current levels in the coming few months. The industry needs to get to these levels of fares for sustainable profitability," he said.
Thiagarajan's airline and budget carrier IndiGo Airlines were the only domestic carriers which reported profits last fiscal. As per Centre for Asia Pacific Aviation, Indian airlines lost around Rs 9,000 crore ($2 billion) last year as demand slipped and oil prices soared in an industry plagued with overcapacity.
But last year's trend has completely reversed this year with not just the demand picking up but even the yields improving.A senior executive with low cost airline GoAir said that all travel segments - leisure and business - were doing well this year.
"This (jump in business and leisure travel), combined with higher fares promise to take us towards better financial numbers," he said.
An analyst with a local broking firm predicted that most airlines will see a surge in yields and PLF in the December quarter. Jitendra Bhargava, executive director of Air India, was less optimistic than his peers. "PLF has certainly improved but fares and yields are still low, making it very hard for us to make money," he said.
Source: Daily News & Analysis
Tuesday, December 1, 2009
Air travel rises, but freight demand falls
Passenger demand for air travel rose in October but freight demand continued to fall, especially in Europe, data showed on Monday, indicating the global economic recovery remains fragile. Data from the International Air Transport Association (IATA) showed passenger demand rose 0.5% on the same month a year before while freight demand fell 0.5% after a 5.4% drop in September.
“Cargo traffic is 14% above the December 2008 low point but remains 15% below the early 2008 peak,” IATA said. “European carriers saw the biggest weakness in demand with a fall of 11.3% compared to October 2008, relatively unchanged from the 13% drop in September,” it said.
Air freight, a key barometer of the strength of world trade, tends to pick up early in the economic recovery cycle when businesses start to replenish their inventories. Passenger demand was 6% better than the low point reached in March 2009, but remained 5% below the peak recorded in early 2008, IATA said.
“Stripping out seasonal fluctuations, passenger capacity has been essentially flat throughout 2009... Yields remain under severe pressure. Although there has been a modest rise in air fares since mid-year, it remains around 20 percent less expensive to fly in real terms today than it was a year ago.”
IATA represents 230 airlines including British Airways, Qantas, United Airlines, Cathay Pacific and Emirates. It forecasts the sector will lose $11 billion on a net basis this year and $4 billion in 2010.
“Cargo traffic is 14% above the December 2008 low point but remains 15% below the early 2008 peak,” IATA said. “European carriers saw the biggest weakness in demand with a fall of 11.3% compared to October 2008, relatively unchanged from the 13% drop in September,” it said.
Air freight, a key barometer of the strength of world trade, tends to pick up early in the economic recovery cycle when businesses start to replenish their inventories. Passenger demand was 6% better than the low point reached in March 2009, but remained 5% below the peak recorded in early 2008, IATA said.
“Stripping out seasonal fluctuations, passenger capacity has been essentially flat throughout 2009... Yields remain under severe pressure. Although there has been a modest rise in air fares since mid-year, it remains around 20 percent less expensive to fly in real terms today than it was a year ago.”
IATA represents 230 airlines including British Airways, Qantas, United Airlines, Cathay Pacific and Emirates. It forecasts the sector will lose $11 billion on a net basis this year and $4 billion in 2010.
Monday, November 30, 2009
Air India flights to operate as usual from tomorrow
Air India flights will operate as normal from Tuesday. This follows the airline management and pilots reaching an agreement in Mumbai on Sunday.
“The agreement involves some financial payout by the airline. The pilots have withdrawn the strike call issued earlier,” a senior airline official told Business Line without divulging details of the agreement reached. Sections of the airline pilots had threatened to go on strike from midnight Monday.
The pilots and management were to meet again on Monday (November 30) at the office of Chief Labour Commissioner here to resolve their differences.
Demands
The agitating pilots were seeking wage revision and parity in wages with other pilots and an inquiry into the mismanagement of the company. A major bone of contention between the agitating pilots and the management has been the proposal to stop paying Productivity- Linked Incentives (PLI) to its employees including pilots. PLI forms a large portion of the monthly salaries of employees.
The airline's annual PLI payout is about Rs 1,500 crore, almost half of which is paid to pilots and cabin crew, while the remaining is shared by about 26,000 employees of the airline. Air India has a total staff strength of 31,500 employees.
The pilots had gone on a four-day strike in September this year. At that time about 200 pilots had reported sick protesting against the decision to cut their PLI by 50 per cent and non-payment of flying allowances for three months. The agitation disrupted the carrier's operations with 240 flights being cancelled during the impasse. The financial loss to the airline was estimated at over Rs 100 crore.
Source: The Hindu Business Line
“The agreement involves some financial payout by the airline. The pilots have withdrawn the strike call issued earlier,” a senior airline official told Business Line without divulging details of the agreement reached. Sections of the airline pilots had threatened to go on strike from midnight Monday.
The pilots and management were to meet again on Monday (November 30) at the office of Chief Labour Commissioner here to resolve their differences.
Demands
The agitating pilots were seeking wage revision and parity in wages with other pilots and an inquiry into the mismanagement of the company. A major bone of contention between the agitating pilots and the management has been the proposal to stop paying Productivity- Linked Incentives (PLI) to its employees including pilots. PLI forms a large portion of the monthly salaries of employees.
The airline's annual PLI payout is about Rs 1,500 crore, almost half of which is paid to pilots and cabin crew, while the remaining is shared by about 26,000 employees of the airline. Air India has a total staff strength of 31,500 employees.
The pilots had gone on a four-day strike in September this year. At that time about 200 pilots had reported sick protesting against the decision to cut their PLI by 50 per cent and non-payment of flying allowances for three months. The agitation disrupted the carrier's operations with 240 flights being cancelled during the impasse. The financial loss to the airline was estimated at over Rs 100 crore.
Source: The Hindu Business Line
Friday, November 27, 2009
Airfares to increase 12% on strong peak-season demand
GET ready to pay more for your air travel this holiday season. Fares are expected to go up by around 12% from the first week of December. Differing from airline to airline as well as sector to sector, the hike would be around Rs 360 per sector, highly-placed airline industry sources said on condition of anonymity.
Captains of the airline industry met in the Capital on Wednesday and have arrived at an informal understanding to avoid undercutting, the sources said. Jet Airways chairman Naresh Goyal, Kingfisher chairman Vijay Mallya, Arvind Jadhav of Air India, Rahul Bhatia of IndiGo and Sanjay Agarwal of SpiceJet were among those present at the meeting of the Federation of Indian Airlines. All the airline companies said there was no joint decision on fares, but the sources said the denial was due to the fear of cartelisation charges which would invite the wrath of the government and regulators.
Mr Goyal and Mr Mallya said the meeting discussed industry issues like the new ground handling policy. Airlines should be allowed to continue self-handling and the issue would be taken up with the concerned authorities, they added.
The proposed fare revision would be effected by tweaking the yield management system of airlines, the sources said. The number of seats sold through the lower buckets would be cut sharply and discounts would be rolled back to the minimum, they added. No announcement would be made, but simple adjustments to the revenue management system, which is run through software, would take care of the hike.
The upward revision would be highest for the last week of December and the first week of January, the sources said. Continuous reduction in capacity since the beginning of this year and better-than-expected peak season demand has enabled airlines to hike tariffs, they added. “Within days of each other, most major airlines would push up their tariffs for the peak season,” the sources added. There was a fear that some airlines, especially the no-frills players, might undercut as they had done on previous occasions and that issue has been sorted out, they explained.
The move gives all airlines an opportunity to wipe up a bit of red ink from their balance sheets. Network carries like Air India, Jet Airways and Kingfisher are expected to go in for higher upward revision as compared to budget carriers like SpiceJet and IndiGo, the sources said.
Jet Airways’ Goyal has been emphasising on the need to cut overcapacity which was knocking out yields, leading to increasing losses. However, he declined to comment on fare hike possibility after the meeting, insisting that the agenda was to sort out problems relating to the new ground handling policy which was to come into place by January 2010.
Without directly stating the need for hiking fares, Kingfisher Airlines chairman Vijay Mallya said: “Five years ago, average (air) fare was Rs 6,000. Now it is Rs 3,000. That’s the revenue side. On the cost side, crude used to cost $35 per barrel. Now it is over $80 per barrel. Over and above this, we have 26% sales tax on aviation turbine fuel. Costs are going up and fares are going down. This cannot be sustainable.” Paramount Airways managing director M Thiagarajan said there should be a balance between growth and profitability. “At the Rs 6,000 level, average fares were high, restricting demand. At the current levels of below Rs 3,000, average fares are too low. There has to be a balance which is somewhere mid-way,” he said.
While demand has been improving during the recent months, airlines are worried about increasing fuel costs. After sliding to $40 per barrel, crude has inched up to $80 per barrel and there is a feeling that prices would only increase once the recovery of the global economy takes roots. The airline industry has been pitching for a relief package from the government, but the civil aviation ministry has ruled out any such assistance, emphasising that only Air India will get support since it is a state-owned company.
PLANE TRUTH
The hike is expected to be around Rs 360 per sector Airline industry captians have arrived at an informal understanding to avoid undercutting The proposed fare revision would be effected by tweaking the yield management system of airlines The upward revision would be highest for the last week of Dec and the first week of Jan The move gives all airlines an opportunity to wipe up a bit of red ink from their balance sheets
Source: The Economic Times
Captains of the airline industry met in the Capital on Wednesday and have arrived at an informal understanding to avoid undercutting, the sources said. Jet Airways chairman Naresh Goyal, Kingfisher chairman Vijay Mallya, Arvind Jadhav of Air India, Rahul Bhatia of IndiGo and Sanjay Agarwal of SpiceJet were among those present at the meeting of the Federation of Indian Airlines. All the airline companies said there was no joint decision on fares, but the sources said the denial was due to the fear of cartelisation charges which would invite the wrath of the government and regulators.
Mr Goyal and Mr Mallya said the meeting discussed industry issues like the new ground handling policy. Airlines should be allowed to continue self-handling and the issue would be taken up with the concerned authorities, they added.
The proposed fare revision would be effected by tweaking the yield management system of airlines, the sources said. The number of seats sold through the lower buckets would be cut sharply and discounts would be rolled back to the minimum, they added. No announcement would be made, but simple adjustments to the revenue management system, which is run through software, would take care of the hike.
The upward revision would be highest for the last week of December and the first week of January, the sources said. Continuous reduction in capacity since the beginning of this year and better-than-expected peak season demand has enabled airlines to hike tariffs, they added. “Within days of each other, most major airlines would push up their tariffs for the peak season,” the sources added. There was a fear that some airlines, especially the no-frills players, might undercut as they had done on previous occasions and that issue has been sorted out, they explained.
The move gives all airlines an opportunity to wipe up a bit of red ink from their balance sheets. Network carries like Air India, Jet Airways and Kingfisher are expected to go in for higher upward revision as compared to budget carriers like SpiceJet and IndiGo, the sources said.
Jet Airways’ Goyal has been emphasising on the need to cut overcapacity which was knocking out yields, leading to increasing losses. However, he declined to comment on fare hike possibility after the meeting, insisting that the agenda was to sort out problems relating to the new ground handling policy which was to come into place by January 2010.
Without directly stating the need for hiking fares, Kingfisher Airlines chairman Vijay Mallya said: “Five years ago, average (air) fare was Rs 6,000. Now it is Rs 3,000. That’s the revenue side. On the cost side, crude used to cost $35 per barrel. Now it is over $80 per barrel. Over and above this, we have 26% sales tax on aviation turbine fuel. Costs are going up and fares are going down. This cannot be sustainable.” Paramount Airways managing director M Thiagarajan said there should be a balance between growth and profitability. “At the Rs 6,000 level, average fares were high, restricting demand. At the current levels of below Rs 3,000, average fares are too low. There has to be a balance which is somewhere mid-way,” he said.
While demand has been improving during the recent months, airlines are worried about increasing fuel costs. After sliding to $40 per barrel, crude has inched up to $80 per barrel and there is a feeling that prices would only increase once the recovery of the global economy takes roots. The airline industry has been pitching for a relief package from the government, but the civil aviation ministry has ruled out any such assistance, emphasising that only Air India will get support since it is a state-owned company.
PLANE TRUTH
Source: The Economic Times
Wednesday, November 25, 2009
Air India’s US flight may be scrapped
Air India's (AI) flights to United States could well turn out to be the next big casualty as the state-run carrier gropes for options to stay afloat in precarious financial health.
A senior Air India executive confirmed that the management was considering a drastic route rationalisation exercise. This could include removing a direct flight to New York, either from Delhi or from Mumbai.
"The idea (of reducing flight to the US) is still in formulation stage, and is unlikely to be taken up in the airline's board meeting slated for later this week," said the executive, who did not wish to be identified, as he was not authorised to speak to the media.
The airline has four daily flights to the US, two each from Mumbai and Delhi, connecting New York, Washington, Chicago and Los Angeles.
Air India chairman and managing director Arvind Jadhav was not available for comments.
"An internal assessment is being made to find out which are the most loss making routes and only then a decision would be taken," the executive said.
The airline, has incurred a loss of Rs 5,548 crore in 200809. It has taken a series of measures to cut costs including rationalisation of wage structure of its 33,000 employees.
Source: The Hindustan Times
A senior Air India executive confirmed that the management was considering a drastic route rationalisation exercise. This could include removing a direct flight to New York, either from Delhi or from Mumbai.
"The idea (of reducing flight to the US) is still in formulation stage, and is unlikely to be taken up in the airline's board meeting slated for later this week," said the executive, who did not wish to be identified, as he was not authorised to speak to the media.
The airline has four daily flights to the US, two each from Mumbai and Delhi, connecting New York, Washington, Chicago and Los Angeles.
Air India chairman and managing director Arvind Jadhav was not available for comments.
"An internal assessment is being made to find out which are the most loss making routes and only then a decision would be taken," the executive said.
The airline, has incurred a loss of Rs 5,548 crore in 200809. It has taken a series of measures to cut costs including rationalisation of wage structure of its 33,000 employees.
Source: The Hindustan Times
Thursday, October 29, 2009
Air India may hit air pocket again from Nov 1
Air India’s operations could be disrupted again from November 1 with a section of employees threatening action over non-payment of productivity-linked incentive (PLI) dues. This could gather momentum with the erstwhile Indian Airlines workforce now contemplating following suit.
Incentive issue
The spokesperson for the Indian Commercial Pilots Association (ICPA), Capt R.S. Otall, said on Wednesday, “If our PLI dues are not paid by November 1, we will take any action from the book.”
He added that these were pending since August this year. The ICPA represents 1,000 former Indian Airlines pilots.
Late last month, executive pilots of Air India went on a five-day strike on the same issue. The airline then had to roll back its decision of 50 per cent cut in PLI. This was to have translated into savings of Rs 20 crore a month had it been enforced on 7,000 of the total 31,500 employees.
Grappling with loss
Air India is still grappling with losses of Rs 7,200 crore accumulated in the last two years. The current fiscal could see it slip deeper into the red with losses of Rs 5,000 crore.
As a result, it is looking at ways and means of cutting costs and reducing wage overheads. The Centre has made it clear that any financial aid would have to be preceded by cost-control.
The Minister of Civil Aviation, Mr Praful Patel, had said this month that Air India was not only looking at reducing costs by Rs 3,000 crore but also increasing revenue by Rs 2,000 crore.
Pre-delivery payments
Sources have said that the airline is expected to get Rs 3,000 crore from the Centre towards pre-delivery payments for a part of the 111 aircraft ordered. In all, it needs Rs 9,000 crore over the next three years.
Last week, the Group of Ministers headed by the Finance Minister, Mr Pranab Mukherjee, said Air India needed to evolve a concrete plan on savings.
Source: The Hindu Business Line
Incentive issue
The spokesperson for the Indian Commercial Pilots Association (ICPA), Capt R.S. Otall, said on Wednesday, “If our PLI dues are not paid by November 1, we will take any action from the book.”
He added that these were pending since August this year. The ICPA represents 1,000 former Indian Airlines pilots.
Late last month, executive pilots of Air India went on a five-day strike on the same issue. The airline then had to roll back its decision of 50 per cent cut in PLI. This was to have translated into savings of Rs 20 crore a month had it been enforced on 7,000 of the total 31,500 employees.
Grappling with loss
Air India is still grappling with losses of Rs 7,200 crore accumulated in the last two years. The current fiscal could see it slip deeper into the red with losses of Rs 5,000 crore.
As a result, it is looking at ways and means of cutting costs and reducing wage overheads. The Centre has made it clear that any financial aid would have to be preceded by cost-control.
The Minister of Civil Aviation, Mr Praful Patel, had said this month that Air India was not only looking at reducing costs by Rs 3,000 crore but also increasing revenue by Rs 2,000 crore.
Pre-delivery payments
Sources have said that the airline is expected to get Rs 3,000 crore from the Centre towards pre-delivery payments for a part of the 111 aircraft ordered. In all, it needs Rs 9,000 crore over the next three years.
Last week, the Group of Ministers headed by the Finance Minister, Mr Pranab Mukherjee, said Air India needed to evolve a concrete plan on savings.
Source: The Hindu Business Line
Monday, October 26, 2009
Paramount Airways in talks to buy Star Aviation
Wants to expand within the country and outside, while Star Aviation, yet to begin operations, has three aircraft ready. Chennai-based Paramount Airlines has sent feelers to a south-based regional carrier, Star Aviation, for a possible acquisition of the airline. Star Aviation got an operating license in 2007, but has yet to start any flights. “We are looking at acquisitions to expand and we are talking with Chennai-based Star Aviation,” said a senior executive of Paramount Airways. Star Aviation Pvt Ltd, part of a Dubai-headquartered conglomerate, the ETA Star group, could not be spoken to for comments.
Paramount is the only airline in India to offer full business class service at prices comparable to the normal economy class fares of other airlines. It flies to 16 destinations in the country. The airline, which started operations in October 2005, operates five planes — two Embraer 170 and three Embraer 175. Established by the Madurai-based textile company, the Paramount Group, it has ordered 10 A321-200 aircraft for short-haul international routes to be launched next year, when it completes the mandatory five year pre-requisite to fly abroad.
The source added that acquisition made sense for the airline, as Star Aviation has a fleet of three Embraer aircraft, which will add to Paramount’s existing strength. There were reports that Paramount was buying GoAir, which has eight aircraft and 5.8 per cent market share, in a cash and equity deal, paying Rs 100-150 crore in cash and a stake of 7-8 per cent in the Paramount Group to the Wadias, who own GoAir. But GoAir has denied all such reports of talks.
Source: Business Standard
Paramount is the only airline in India to offer full business class service at prices comparable to the normal economy class fares of other airlines. It flies to 16 destinations in the country. The airline, which started operations in October 2005, operates five planes — two Embraer 170 and three Embraer 175. Established by the Madurai-based textile company, the Paramount Group, it has ordered 10 A321-200 aircraft for short-haul international routes to be launched next year, when it completes the mandatory five year pre-requisite to fly abroad.
The source added that acquisition made sense for the airline, as Star Aviation has a fleet of three Embraer aircraft, which will add to Paramount’s existing strength. There were reports that Paramount was buying GoAir, which has eight aircraft and 5.8 per cent market share, in a cash and equity deal, paying Rs 100-150 crore in cash and a stake of 7-8 per cent in the Paramount Group to the Wadias, who own GoAir. But GoAir has denied all such reports of talks.
Source: Business Standard
Thursday, October 22, 2009
Air travel picks up again, cheers bleeding airlines
Indications from latest air travel bookings suggest that airlines saddled with losses totalling Rs 10,000 crore in 2008-09 and desperately short of funds could be looking at a revival.
The first fortnight of October witnessed a 35 per cent jump in online air ticket bookings compared with the same period last year and experts believe the uptick may extend to two or three quarters ahead. It was 28 per cent in the previous fortnight. "Growth would be sustainable this time. We are quiet upbeat about the future," said Ankur Bhatia, managing director, Amadeus India, the platform that handles more than 60 percent online air reservations in India.
Increased demand could help capacity utilisation in Jet Airways and Kingfisher Airlines, Bhatia said.
A rebound in business confidence, a revival in the stock market and a rise in industrial growth are among factors spurring increased air travel, in addition to festival season travel. Civil Aviation Minister Praful Patel told reporters in Mumbai last week that sentiments had improved to suggest recovery, but added that the pace may be slower than during the earlier rebound.
Source: Hindustan Times
The first fortnight of October witnessed a 35 per cent jump in online air ticket bookings compared with the same period last year and experts believe the uptick may extend to two or three quarters ahead. It was 28 per cent in the previous fortnight. "Growth would be sustainable this time. We are quiet upbeat about the future," said Ankur Bhatia, managing director, Amadeus India, the platform that handles more than 60 percent online air reservations in India.
Increased demand could help capacity utilisation in Jet Airways and Kingfisher Airlines, Bhatia said.
A rebound in business confidence, a revival in the stock market and a rise in industrial growth are among factors spurring increased air travel, in addition to festival season travel. Civil Aviation Minister Praful Patel told reporters in Mumbai last week that sentiments had improved to suggest recovery, but added that the pace may be slower than during the earlier rebound.
Source: Hindustan Times
Wednesday, October 21, 2009
Jet Airways, Air India line up holiday packages to woo customers
Private carrier Jet Airways and Air India (AI) have introduced attractive holiday packages at the onset of Diwali. While Jet has launched JetEscapes, which offer attractive packages to international and domestic destinations, Air India has 400 domestic and over ten international destinations on offer in their holiday packages this season. The move is aimed to spike up revenue figures for the airline. AI had raked in Rs 74 crore from sale of holiday packages in 2008.
Co-incidentally, both carriers had declining load factors in the previous months since their pilots struck work for four days. On the one hand, both the carriers want to improve yields and gain back customer confidence.
The move is termed as a marketing strategy to woo back fliers to the airline. JetEscapes offers attractive holiday packages beginning at Rs 13,000 onwards for destinations such as Alleppy, Leh and Shimla. Jet Airways chief commercial officer Sudheer Raghavan said, “JetEscapes is flexible, dynamic and assures instant co firmation of air and hotel arrangements.”
Meanwhile, AI has on offer over 400 comprehensive package options covering 150 cities in 22 states of the country and over 10 international destinations. A package normally includes return airfares, airport transfers, accommodation in standard 3-5 star hotels, meals and local sightseeing, all at economical prices.
Last year, AI sold 1,110 holiday packages in the first 20 days of May alone, fetching the airline Rs 8.5 crore. In April 2008, around 400 packages had been sold. In fiscal 2007-08, the airline earned a revenue of Rs 74.10 crore from the sale of 13,120 holiday packages.
Jet lost around $12 million in four days in the first week of September when it’s over 400 senior pilots struck work to protest against the dismissal of two of their colleagues for forming a union. Each passing day of the strike, the number of passenger came down to 22,000 from 24,000 to 7,000 on the last day of the strike. Similarly, even AI witnessed 10% dip in its passenger numbers in mid-September when its executive pilots went on ‘sick leave’ to protest against a cut in their salaries. The carrier flies nearly 25,000 passengers each day.
Industry observers said since most airlines have faced poor loads in the first quarter of this fiscal, other airlines may also announce attractive fares this season to gain load factors. The sector is also poised to post losses of over Rs 10,000 crore for the current financial year, according to industry estimates.
Source: The Financial Express
Co-incidentally, both carriers had declining load factors in the previous months since their pilots struck work for four days. On the one hand, both the carriers want to improve yields and gain back customer confidence.
The move is termed as a marketing strategy to woo back fliers to the airline. JetEscapes offers attractive holiday packages beginning at Rs 13,000 onwards for destinations such as Alleppy, Leh and Shimla. Jet Airways chief commercial officer Sudheer Raghavan said, “JetEscapes is flexible, dynamic and assures instant co firmation of air and hotel arrangements.”
Meanwhile, AI has on offer over 400 comprehensive package options covering 150 cities in 22 states of the country and over 10 international destinations. A package normally includes return airfares, airport transfers, accommodation in standard 3-5 star hotels, meals and local sightseeing, all at economical prices.
Last year, AI sold 1,110 holiday packages in the first 20 days of May alone, fetching the airline Rs 8.5 crore. In April 2008, around 400 packages had been sold. In fiscal 2007-08, the airline earned a revenue of Rs 74.10 crore from the sale of 13,120 holiday packages.
Jet lost around $12 million in four days in the first week of September when it’s over 400 senior pilots struck work to protest against the dismissal of two of their colleagues for forming a union. Each passing day of the strike, the number of passenger came down to 22,000 from 24,000 to 7,000 on the last day of the strike. Similarly, even AI witnessed 10% dip in its passenger numbers in mid-September when its executive pilots went on ‘sick leave’ to protest against a cut in their salaries. The carrier flies nearly 25,000 passengers each day.
Industry observers said since most airlines have faced poor loads in the first quarter of this fiscal, other airlines may also announce attractive fares this season to gain load factors. The sector is also poised to post losses of over Rs 10,000 crore for the current financial year, according to industry estimates.
Source: The Financial Express
Monday, October 19, 2009
Travel agents may get their pie from foreign airlines
The aviation regulator has ruled that foreign carriers should pay commission to ticketing agents, sounding the death knell for a fee-based system initiated by foreign airlines last November.
The decision by the Directorate General of Civil Aviation (DGCA) will benefit about 2,400 travel agents in the country as the 3% commission they used to receive from the airlines was much higher than what they charge travellers as transaction fee. This will also benefit the customer, who will escape paying the transaction fee, and may also force the agent to share a part of his commission.
“We have found that the foreign airlines’ decision to withdraw the commission system is not in compliance with the law,” said an official with the regulator. “In the past, Air India and Jet Airways had introduced zero-commission systems, but they had to reinstate the 3% commission to agents,” he said, requesting anonymity. In all, 14 foreign airlines, including Lufthansa, Air France, British Airways and Qatar Airlines, had resorted to a zero-commission regime last year and introduced a transaction fee-based model wherein the traveller pays a fee of Rs 250-Rs 5,000 per ticket to the agent, depending on the relative bargaining power of the parties.
More than 85% air travellers in the country book their tickets through travel agents. The percentage is even higher in the lucrative international air travel segment. The shift to the transaction fee model had, therefore, significantly reduced travel agents’ earnings.
Source: Economic Times
The decision by the Directorate General of Civil Aviation (DGCA) will benefit about 2,400 travel agents in the country as the 3% commission they used to receive from the airlines was much higher than what they charge travellers as transaction fee. This will also benefit the customer, who will escape paying the transaction fee, and may also force the agent to share a part of his commission.
“We have found that the foreign airlines’ decision to withdraw the commission system is not in compliance with the law,” said an official with the regulator. “In the past, Air India and Jet Airways had introduced zero-commission systems, but they had to reinstate the 3% commission to agents,” he said, requesting anonymity. In all, 14 foreign airlines, including Lufthansa, Air France, British Airways and Qatar Airlines, had resorted to a zero-commission regime last year and introduced a transaction fee-based model wherein the traveller pays a fee of Rs 250-Rs 5,000 per ticket to the agent, depending on the relative bargaining power of the parties.
More than 85% air travellers in the country book their tickets through travel agents. The percentage is even higher in the lucrative international air travel segment. The shift to the transaction fee model had, therefore, significantly reduced travel agents’ earnings.
Source: Economic Times
Thursday, October 15, 2009
SpiceJet plans to fly overseas next year
Low-cost carrier SpiceJet Airlines, promoted by a group of investors led by the Kansagra family and Delhi-based Ajay Singh, is working on a plan to start international operations next year, making it the third private Indian carrier after Jet Airways and Kingfisher to fly overseas.
The airline qualifies for international operations from June next year after it completes five years of domestic operations, the minimum stipulated by the government.
The airline plans to fly mainly to Saarc countries, south-east Asia and select west Asian routes, rather than long-haul routes such as London and New York as Jet and Kingfisher have done. "We are planning our international launch carefully and will fly only on routes that we think are under-served or have potential for more flights," says Sanjay Agarwal, chief executive officer, SpiceJet in an interview to Business Standard. "Agarwal explained that the airline would start operations in sectors in which SpiceJet's Boeing 737 fleet can fly. ’We do not plan have to lease aircraft exclusively for international operations," he said.
Source: Business Standard
The airline qualifies for international operations from June next year after it completes five years of domestic operations, the minimum stipulated by the government.
The airline plans to fly mainly to Saarc countries, south-east Asia and select west Asian routes, rather than long-haul routes such as London and New York as Jet and Kingfisher have done. "We are planning our international launch carefully and will fly only on routes that we think are under-served or have potential for more flights," says Sanjay Agarwal, chief executive officer, SpiceJet in an interview to Business Standard. "Agarwal explained that the airline would start operations in sectors in which SpiceJet's Boeing 737 fleet can fly. ’We do not plan have to lease aircraft exclusively for international operations," he said.
Source: Business Standard
Wednesday, October 14, 2009
SpiceJet says overseas flights depend on market condition
SpiceJet, the New Delhi-based low-cost carrier, is reviewing its overseas flight plans. The airline will be eligible for flying overseas in May 2010. According to the airline, the plan to go international will depend on the market scenario.
“We are more concerned about the yields and are still evaluating the viability. We will begin international operations only if it makes economic sense and not just because we become eligible to fly international from next year,” Mr Sanjay Aggarwal told Business Line. The Directorate General of Civil Aviation (DGCA) rule states that an airline should complete five years of domestic operations before it becomes eligible to fly to foreign destinations.
“We have filed an application with the DGCA for the regulator’s record that we will be completing the mandatory five years on May 23, 2010. May be in the next 2-3 months we will take a firm call on when to begin operations,” said Mr Aggarwal. Also, SpiceJet will get its 21st aircraft in June 2010, which will also meet the regulation of having a fleet of 20 aircraft before going overseas, he said.
SpiceJet stock closed 1.34 per cent down, at Rs 40.35, on the BSE on Monday. All will be Boeing 737s and it has no plans of ordering wide-body planes for international operations. Mr Aggarwal maintained that as and when the carrier flies overseas, it will retain its no-frill model.
On the routes the carrier is looking at, he said “wherever a Boeing 737 can fly”. Earlier, the airline had said it was examining options of going to Gulf and South-East Asian destinations.
He also said SpiceJet may not require additional funding for the expansions. “We are current on all our payments and have maintained costs at the lower side. Plus, we still have money in the bank, so there is no immediate requirement for cash,” he said.
Source: The Hindu Business Line
“We are more concerned about the yields and are still evaluating the viability. We will begin international operations only if it makes economic sense and not just because we become eligible to fly international from next year,” Mr Sanjay Aggarwal told Business Line. The Directorate General of Civil Aviation (DGCA) rule states that an airline should complete five years of domestic operations before it becomes eligible to fly to foreign destinations.
“We have filed an application with the DGCA for the regulator’s record that we will be completing the mandatory five years on May 23, 2010. May be in the next 2-3 months we will take a firm call on when to begin operations,” said Mr Aggarwal. Also, SpiceJet will get its 21st aircraft in June 2010, which will also meet the regulation of having a fleet of 20 aircraft before going overseas, he said.
SpiceJet stock closed 1.34 per cent down, at Rs 40.35, on the BSE on Monday. All will be Boeing 737s and it has no plans of ordering wide-body planes for international operations. Mr Aggarwal maintained that as and when the carrier flies overseas, it will retain its no-frill model.
On the routes the carrier is looking at, he said “wherever a Boeing 737 can fly”. Earlier, the airline had said it was examining options of going to Gulf and South-East Asian destinations.
He also said SpiceJet may not require additional funding for the expansions. “We are current on all our payments and have maintained costs at the lower side. Plus, we still have money in the bank, so there is no immediate requirement for cash,” he said.
Source: The Hindu Business Line
Monday, October 12, 2009
Jet Airways announces tour packages
Jet Airways has come out with all inclusive holiday packages starting Rs 13,000 per person to enable holidaymakers avail value for money deals. Jet Airways under its travel wing JetEscapes has announced over 650 packages to over 100 domestic and overseas destinations.
A tour package to Goa starts from Rs 13,000 per person for four days three nights while a trip to Colombo for three days and two nights would cost Rs 14,900 onwards per person on a twin-sharing basis.
Similarly, a six days five nights package to Kerala starts from Rs 20,500 per person and a three days two nights package to Kuala Lumpur starts from Rs 15,425 per person. These packages include airfare, air taxes, hotel accommodation, airport transfer, sightseeing and travel insurance. It does not include meals during the tour, the airline said.
“The new JetEscapes is flexible and real-time with instant confirmation of air, hotel and related land arrangements. This enables us to offer travellers complete holiday packages at very competitive prices across a range of price points,” said Sudheer Raghavan, Chief Commercial Officer, Jet Airways.
Raghavan said these packages offer travelers the flexibility to customise their travel and packages can be booked with hotel check-in - check-out dates that do not necessarily correspond with their flight dates, at no additional cost.
Source: Hindustan Times
A tour package to Goa starts from Rs 13,000 per person for four days three nights while a trip to Colombo for three days and two nights would cost Rs 14,900 onwards per person on a twin-sharing basis.
Similarly, a six days five nights package to Kerala starts from Rs 20,500 per person and a three days two nights package to Kuala Lumpur starts from Rs 15,425 per person. These packages include airfare, air taxes, hotel accommodation, airport transfer, sightseeing and travel insurance. It does not include meals during the tour, the airline said.
“The new JetEscapes is flexible and real-time with instant confirmation of air, hotel and related land arrangements. This enables us to offer travellers complete holiday packages at very competitive prices across a range of price points,” said Sudheer Raghavan, Chief Commercial Officer, Jet Airways.
Raghavan said these packages offer travelers the flexibility to customise their travel and packages can be booked with hotel check-in - check-out dates that do not necessarily correspond with their flight dates, at no additional cost.
Source: Hindustan Times
Friday, October 9, 2009
Jet Airways CEO resigns, old hand Kardassis back at the helm
India’s largest private airline, Jet Airways, has undergone top-level changes with its Chief Executive Officer (CEO) Wolfgang Prock-Schauer quitting the airline to join British Midland Plc (BMI) airline as its CEO.
Prock-Schauer who led Jet for nearly six years and helped in making it an international airline will be leaving the airline on October 15. Naresh Goyal, Jet’s chairman has appointed his old friend, advisor and Jet’s former CEO Nikos K Kardassis (52) as the acting CEO.
“We need to bring financial stability to the airline. In the coming months we will restructure the debt and increase the capital base by raising more funds. We have a good product and I need to continue what ever has been done in the past months,” Kardassis told Hindustan Times.
Kardassis was the airline’s CEO during its infancy, between 1994 and 1999. He had then left the organisation to be with his family. Kardassis, formerly with Merrill Lynch and General Electric joined back Jet 18 months ago and has been heading the Americas operations of the airline as senior vice-president. In addition, he has been advising Goyal on finance and strategy.
Kardassis takes over at a time when the 16-year-old airline is passing through a severe financial crisis amid a price war, a demand slump and a pilots’ unrest.
A confident Kardassis said that his immediate priority would be to bring financial stability and maintain continuity
Source: The Hindustan Times
Prock-Schauer who led Jet for nearly six years and helped in making it an international airline will be leaving the airline on October 15. Naresh Goyal, Jet’s chairman has appointed his old friend, advisor and Jet’s former CEO Nikos K Kardassis (52) as the acting CEO.
“We need to bring financial stability to the airline. In the coming months we will restructure the debt and increase the capital base by raising more funds. We have a good product and I need to continue what ever has been done in the past months,” Kardassis told Hindustan Times.
Kardassis was the airline’s CEO during its infancy, between 1994 and 1999. He had then left the organisation to be with his family. Kardassis, formerly with Merrill Lynch and General Electric joined back Jet 18 months ago and has been heading the Americas operations of the airline as senior vice-president. In addition, he has been advising Goyal on finance and strategy.
Kardassis takes over at a time when the 16-year-old airline is passing through a severe financial crisis amid a price war, a demand slump and a pilots’ unrest.
A confident Kardassis said that his immediate priority would be to bring financial stability and maintain continuity
Source: The Hindustan Times
Thursday, October 8, 2009
Airlines get rap for safety shortfalls
India's aviation regulator has asked Jet Airways (India) ite, Chennai-based Paramount Airways Pvt. Ltd and Gurgaon based MDLR Airlines Pvt. Ltd to explain the lack of proper safety infrastructure and procedures followed by them during operations.
The show-cause notices by the Directorate General of Civil Aviation (DGCA) were issued after several surveillance checks by the regulator since the start of the year as part of an audit by the US aviation regulator, the Federal Aviation Administration (FAA).
FAA completed its audit last month and maintained the highest safety level for India, abstaining from a downgrade that could have led to a complete freeze on the expansion of services to the US by Indian carriers.
The three carriers have been asked to explain various safety-related lapses, said a government official, who asked not to be named because of the sensitivity of the matter. Mint has also reviewed documents that list the infractions.
Paramount Airways confirmed the DGCA notice and said it was moving to address the anomalies.
"Whatever DGCA has identified, majority of them we have complied with and we have also given them a schedule of specified completion dates," a Paramount Airways spokesman said.
JetLite denied receiving any notice, while MDLR said it had sought time to make rectifications.
The show-cause notices don't necessarily make the airlines unsafe to fly, but show that mandatory safety procedures, a key part of their functioning, were not followed as per stated guidelines when the checks were conducted.
"We have been very very lucky," said Mohan Ranganathan, a Chennai-based air safety consultant.The audits show airlines were taking advantage of DGCA's manpower shortage to bypass rules, he said.
"These things will have serious ramifications from an insurance and legal point of view," Ranganathan said. "For example, if there is an incident or an accident and there is an American citizen on board who's life is involved, that airline is liable for serious lawsuits in US. And even for the others...the insurance policies say very clearly if any rule and regulation of the respective country is not followed, the policy is invalid." The regulator has asked JetLite to explain deficiencies in air safety infrastructure. Paramount Airways has been found wanting in around 69 areas of aircraft maintenance and lacking a proper permanent investigation board for airline incidents and accidents.
JetLite said no "show-cause notice" had been issued to it, and rejected the contention that there were deficiencies in the air safety infrastructure. "DGCA has officially accepted the JetLite Flight Safety infrastructure. All airlines are subject to audits and inspections in relation to surveillance and oversight by DGCA in the interest of safety," the carrier said in an email. "Minor observations pertaining to JetLite during audits have been cleared by DGCA."
Two separate checks on MDLR, which operates a single aircraft currently, found at least 10 deficiencies. DGCA found there were "no authorized trim staff, no despatch at the airport, no fluorescent jackets for walk around, no Jeppesen updates with pilots, no single-page checklist on board, no manuals available, no emergency procedures/response plan, inadequate knowledge of staff in ops (operations)".
"Yes we have been given a show-cause notice, several lacunae have been found. There was a lot of documentation (safety manuals and records), which were washed out when we moved terminals" in Delhi, said Koustav M. Dhar, chief operating officer of MDLR.
"We have requested 45 days' time to bring up our standards. We have asked DGCA to do a re-inspection after 45 days."
Jeppesen charts are required for aeronautical charting, navigation and flight planning. They are, for instance, used to identify the path and altitude to be taken when there's bad weather.
Ranganathan said the show cause notices disclosed "blatant violations", which can't be "given a waiver" by DGCA. "If they lack trained manpower, the safety department is non-functional and DGCA has to act," he said. "The extreme step is to ground the airline or, temporarily, permit them to outsource the safety operations with a definite time scale to implement the DGCA requirement," Ranganathan said.
DGCA found during its check of Paramount that only part of the Jeppesen updates were available on the flight. They were instead available only at the flight despatch department of the airline.
"What will they (pilots) do if there is a hijack, if there is a flight diversion due to bad weather?" Ranganathan asked. "You have to pay for every plate (of Jeppesen charts), so they are perhaps cutting costs."
Paramount didn't have a permanent investigation board, which is meant to inquire into accidents and incidents, report on their causes and identify methods to prevent recurrence. In the case of JetLite, one of the checks disclosed that a pilot was flying after his instrument rating expired. The instrument rating check is key for flights above 15,000 feet and is granted on a yearly basis.
Pilots cannot fly if their rating has expired. On another flight, a cabin crew member's dangerous goods training had expired.
Other carriers, including Air India, Kingfisher Airlines, GoAir, IndiGo, SpiceJet and Jet Airways, have also been asked to rectify procedural issues found during the DGCA checks.
Ranganathan said DGCA should make the implementation of regulations stricter and penalize carriers. "The threat of FAA downgrade does not exist now, but that is no reason to relax," he said. "It is up to new director general Nasim Zaidi to take proactive action."
Source: Mint
The show-cause notices by the Directorate General of Civil Aviation (DGCA) were issued after several surveillance checks by the regulator since the start of the year as part of an audit by the US aviation regulator, the Federal Aviation Administration (FAA).
FAA completed its audit last month and maintained the highest safety level for India, abstaining from a downgrade that could have led to a complete freeze on the expansion of services to the US by Indian carriers.
The three carriers have been asked to explain various safety-related lapses, said a government official, who asked not to be named because of the sensitivity of the matter. Mint has also reviewed documents that list the infractions.
Paramount Airways confirmed the DGCA notice and said it was moving to address the anomalies.
"Whatever DGCA has identified, majority of them we have complied with and we have also given them a schedule of specified completion dates," a Paramount Airways spokesman said.
JetLite denied receiving any notice, while MDLR said it had sought time to make rectifications.
The show-cause notices don't necessarily make the airlines unsafe to fly, but show that mandatory safety procedures, a key part of their functioning, were not followed as per stated guidelines when the checks were conducted.
"We have been very very lucky," said Mohan Ranganathan, a Chennai-based air safety consultant.The audits show airlines were taking advantage of DGCA's manpower shortage to bypass rules, he said.
"These things will have serious ramifications from an insurance and legal point of view," Ranganathan said. "For example, if there is an incident or an accident and there is an American citizen on board who's life is involved, that airline is liable for serious lawsuits in US. And even for the others...the insurance policies say very clearly if any rule and regulation of the respective country is not followed, the policy is invalid." The regulator has asked JetLite to explain deficiencies in air safety infrastructure. Paramount Airways has been found wanting in around 69 areas of aircraft maintenance and lacking a proper permanent investigation board for airline incidents and accidents.
JetLite said no "show-cause notice" had been issued to it, and rejected the contention that there were deficiencies in the air safety infrastructure. "DGCA has officially accepted the JetLite Flight Safety infrastructure. All airlines are subject to audits and inspections in relation to surveillance and oversight by DGCA in the interest of safety," the carrier said in an email. "Minor observations pertaining to JetLite during audits have been cleared by DGCA."
Two separate checks on MDLR, which operates a single aircraft currently, found at least 10 deficiencies. DGCA found there were "no authorized trim staff, no despatch at the airport, no fluorescent jackets for walk around, no Jeppesen updates with pilots, no single-page checklist on board, no manuals available, no emergency procedures/response plan, inadequate knowledge of staff in ops (operations)".
"Yes we have been given a show-cause notice, several lacunae have been found. There was a lot of documentation (safety manuals and records), which were washed out when we moved terminals" in Delhi, said Koustav M. Dhar, chief operating officer of MDLR.
"We have requested 45 days' time to bring up our standards. We have asked DGCA to do a re-inspection after 45 days."
Jeppesen charts are required for aeronautical charting, navigation and flight planning. They are, for instance, used to identify the path and altitude to be taken when there's bad weather.
Ranganathan said the show cause notices disclosed "blatant violations", which can't be "given a waiver" by DGCA. "If they lack trained manpower, the safety department is non-functional and DGCA has to act," he said. "The extreme step is to ground the airline or, temporarily, permit them to outsource the safety operations with a definite time scale to implement the DGCA requirement," Ranganathan said.
DGCA found during its check of Paramount that only part of the Jeppesen updates were available on the flight. They were instead available only at the flight despatch department of the airline.
"What will they (pilots) do if there is a hijack, if there is a flight diversion due to bad weather?" Ranganathan asked. "You have to pay for every plate (of Jeppesen charts), so they are perhaps cutting costs."
Paramount didn't have a permanent investigation board, which is meant to inquire into accidents and incidents, report on their causes and identify methods to prevent recurrence. In the case of JetLite, one of the checks disclosed that a pilot was flying after his instrument rating expired. The instrument rating check is key for flights above 15,000 feet and is granted on a yearly basis.
Pilots cannot fly if their rating has expired. On another flight, a cabin crew member's dangerous goods training had expired.
Other carriers, including Air India, Kingfisher Airlines, GoAir, IndiGo, SpiceJet and Jet Airways, have also been asked to rectify procedural issues found during the DGCA checks.
Ranganathan said DGCA should make the implementation of regulations stricter and penalize carriers. "The threat of FAA downgrade does not exist now, but that is no reason to relax," he said. "It is up to new director general Nasim Zaidi to take proactive action."
Source: Mint
Wednesday, October 7, 2009
Air India mid-air brawl: Pilot, flight purser suspended
State-run Air India on Tuesday suspended a pilot and a flight purser who were involved in a midair scuffle on Saturday aboard an international flight from Sharjah to Delhi, and put off duty the co-pilot and air hostess concerned.
"Yes, we have suspended the pilot and the flight purser and derostered the co-pilot and the air hostess concerned," a spokesperson of the airline said on Tuesday, adding an internal inquiry into the incident was still on.
The incident took place aboard the IC-884 flight that was also reportedly left unmanned during the mid-air scuffle that broke out between the pilots and cabin crew Saturday. But Air India Monday denied the flight remained unmanned during the scuffle.
The four were identified as Ranbir Arora, commander, Aditya Chopra, co-pilot, Amit Khanna, flight purser and air hostess Komal Singh.
The state-run airline grounded the pilots and the cabin crew, who were involved in the incident, after the Delhi Police registered a case of molestation against the pilots on a complaint by the air hostess.
The president of the Indian Commercial Pilot's Association (ICPA) Shailendra Singh spoke in favour of the pilots and said they were not at fault, and no person can barge into the cockpit and pick up a fight with the pilots.
"I have spoken to the pilot and the co-pilot. They had maintained there cool. There is a certain hierarchy in the cockpit that has to be followed," Singh told reporters here soon after the airline announced its action against the crew members.
The National Commission for Women has also formed a panel to probe the charges of assault levelled by the Air India air hostess against the two pilots after she filed a formal complaint on Monday.
"She came here and sat with me for six hours. She has filed a complaint with me. We have written to Air India to inquire into the matter and also informed them about the Supreme Court guidelines on sexual harassment at the workplace," commission chairperson Girija Vyas said.
The incident is understood to have originated in some verbal exchanges between the two sides during the pre-flight briefing session ahead of takeoff from Sharjah, the police said.
The Airbus A-320 from Sharjah was carrying 106 passengers and seven crew and had reached Lucknow when the matter was reported.
The case was registered here under Sections 323 (voluntarily causing hurt), 354 (assault or use of criminal force against a woman with the intent to outrage her modesty) and 34 (common intention) of the Indian Penal Code.
Source: The Times of India
"Yes, we have suspended the pilot and the flight purser and derostered the co-pilot and the air hostess concerned," a spokesperson of the airline said on Tuesday, adding an internal inquiry into the incident was still on.
The incident took place aboard the IC-884 flight that was also reportedly left unmanned during the mid-air scuffle that broke out between the pilots and cabin crew Saturday. But Air India Monday denied the flight remained unmanned during the scuffle.
The four were identified as Ranbir Arora, commander, Aditya Chopra, co-pilot, Amit Khanna, flight purser and air hostess Komal Singh.
The state-run airline grounded the pilots and the cabin crew, who were involved in the incident, after the Delhi Police registered a case of molestation against the pilots on a complaint by the air hostess.
The president of the Indian Commercial Pilot's Association (ICPA) Shailendra Singh spoke in favour of the pilots and said they were not at fault, and no person can barge into the cockpit and pick up a fight with the pilots.
"I have spoken to the pilot and the co-pilot. They had maintained there cool. There is a certain hierarchy in the cockpit that has to be followed," Singh told reporters here soon after the airline announced its action against the crew members.
The National Commission for Women has also formed a panel to probe the charges of assault levelled by the Air India air hostess against the two pilots after she filed a formal complaint on Monday.
"She came here and sat with me for six hours. She has filed a complaint with me. We have written to Air India to inquire into the matter and also informed them about the Supreme Court guidelines on sexual harassment at the workplace," commission chairperson Girija Vyas said.
The incident is understood to have originated in some verbal exchanges between the two sides during the pre-flight briefing session ahead of takeoff from Sharjah, the police said.
The Airbus A-320 from Sharjah was carrying 106 passengers and seven crew and had reached Lucknow when the matter was reported.
The case was registered here under Sections 323 (voluntarily causing hurt), 354 (assault or use of criminal force against a woman with the intent to outrage her modesty) and 34 (common intention) of the Indian Penal Code.
Source: The Times of India
Monday, October 5, 2009
Air India cuts fares up to 8% to woo flyers
With pilot strike coming to an end, Air India has come out with discounted fares to win back customers. The national carrier, which is limping back to normalcy after a four-day strike, said there will be a maximum of 8% cut in fares for three to six months, in different categories. The airline had lost around Rs 84 crore in cancellations during the strike period.
In a move similar to Jet Airways’ measures after its own pilots strike, Air India placed advertisements in national newspapers welcoming travellers back and offered discounts, where passengers can save up to Rs 3,000 in different plans.
Air India is offering schemes where a passenger can buy a four-coupon Economy class ticket for Rs 41,316 with a validity of three months for single user, a drop of 8% compared to the earlier fare. Similarly, an eight-coupon Economy class single user tickets can be bought for Rs 82,632 with a validity of six months.
The Maharaja, as the carrier is also called, has introduced different plans for corporate houses, where employees can buy corporate tickets in the Economy class with 12 coupons, for Rs 123,948 having six months validity, with multiple user facility. A 12-coupon Executive class multiple user ticket with a validity of six months will cost Rs 1,66,800. It means an employee can use at any date like an open ticket.
“A passenger can save around Rs 2,000-3,000 per coupon in the offerings,” said an AI spokesperson. “The tickets under these schemes are available for sale till October 31.” Lowest fares on domestic flights will be available to larger number of passengers, as the number of seats has been increased in the reservation system, he added.
Recently, Jet had offered a 50% discount on total fare (economy class) on all domestic flights across Jet Airways and Jet Konnect, too woo back customers who went to competition due to the pilots strike.
The measures, however are not likely to benefit the carrier in the long run, while they may increase load factor immediately, say analysts. The company posted losses of Rs 7,200 crore in the previous fiscal year. With borrowings of Rs 15,000 crore, the cash-strapped carrier has asked for loan and equity infusion from the government. Its current equity capital stands at Rs145 crore.
Source: The Economic Times
In a move similar to Jet Airways’ measures after its own pilots strike, Air India placed advertisements in national newspapers welcoming travellers back and offered discounts, where passengers can save up to Rs 3,000 in different plans.
Air India is offering schemes where a passenger can buy a four-coupon Economy class ticket for Rs 41,316 with a validity of three months for single user, a drop of 8% compared to the earlier fare. Similarly, an eight-coupon Economy class single user tickets can be bought for Rs 82,632 with a validity of six months.
The Maharaja, as the carrier is also called, has introduced different plans for corporate houses, where employees can buy corporate tickets in the Economy class with 12 coupons, for Rs 123,948 having six months validity, with multiple user facility. A 12-coupon Executive class multiple user ticket with a validity of six months will cost Rs 1,66,800. It means an employee can use at any date like an open ticket.
“A passenger can save around Rs 2,000-3,000 per coupon in the offerings,” said an AI spokesperson. “The tickets under these schemes are available for sale till October 31.” Lowest fares on domestic flights will be available to larger number of passengers, as the number of seats has been increased in the reservation system, he added.
Recently, Jet had offered a 50% discount on total fare (economy class) on all domestic flights across Jet Airways and Jet Konnect, too woo back customers who went to competition due to the pilots strike.
The measures, however are not likely to benefit the carrier in the long run, while they may increase load factor immediately, say analysts. The company posted losses of Rs 7,200 crore in the previous fiscal year. With borrowings of Rs 15,000 crore, the cash-strapped carrier has asked for loan and equity infusion from the government. Its current equity capital stands at Rs145 crore.
Source: The Economic Times
Thursday, October 1, 2009
Air India plans to woo back passengers
For air passengers who have been haggling with the travel agents over high fares and low seat availability for the last four days due to Air India (AI) crisis – it is time to breathe easy.
The national carrier is working on special discount offers to woo back its lost passengers. “Yes, we are going to announce special discounts for our passengers. We are working on the details as in to what extent and which routes these discounts should be offered. The minimum discount will be 10 per cent,” a senior AI official, who did not wish to be named, said.
The carrier has lost over 50 per cent of its passengers in the five days of strike. It had stopped bookings from Monday night which opened only on Wednesday afternoon.
The focus is now to add new passengers. “People who were planning to travel immediately must have cancelled their bookings and must have got air tickets of some other carriers. The discounted fares will help us gain back passengers who are going to fly in the next few days,” the AI official said.
The passenger traffic for AI has come down to about 14,000 from about 33,000 in the normal days. The offer – likely to be announced by Thursday – will not have much impact on international bookings though.
“The international bookings are done much in advance. Once a passenger has cancelled his booking, it is unlikely that he will book his tickets before a month. So, it is difficult to win back those passengers,” he said.
The carrier has lost about Rs 130 crore in the last five days due to pilots strike. The huge cancellations in the booking have give equally significant traffic to the private carriers. While the usual seat factor for these airlines varies between 70-80 per cent during festival season, this went up to 90 per cent due to AI cancellations. “AI will have to offer special fares to attract customers. The carrier has lost about 70,000 passengers in the last five days. They will have to take initiatives to win them back,” Ankur Bhatia, executive director of Bird Group said.
It restarted operating long haul flights including Delhi-Frankfurt-Chicago, Mumbai-Franfurt-Newark, Mumbai-London, Delhi-London, Amritsar-London-Toronto and Ahmedabad-Frankfurt. For domestic routes, it has drawn up a flight restoration plan. It cancelled 111 flights on Wednesday in advance due to non availability of pilots. The flights will be gradually reinstated.
Source: Financial Chronicle
The national carrier is working on special discount offers to woo back its lost passengers. “Yes, we are going to announce special discounts for our passengers. We are working on the details as in to what extent and which routes these discounts should be offered. The minimum discount will be 10 per cent,” a senior AI official, who did not wish to be named, said.
The carrier has lost over 50 per cent of its passengers in the five days of strike. It had stopped bookings from Monday night which opened only on Wednesday afternoon.
The focus is now to add new passengers. “People who were planning to travel immediately must have cancelled their bookings and must have got air tickets of some other carriers. The discounted fares will help us gain back passengers who are going to fly in the next few days,” the AI official said.
The passenger traffic for AI has come down to about 14,000 from about 33,000 in the normal days. The offer – likely to be announced by Thursday – will not have much impact on international bookings though.
“The international bookings are done much in advance. Once a passenger has cancelled his booking, it is unlikely that he will book his tickets before a month. So, it is difficult to win back those passengers,” he said.
The carrier has lost about Rs 130 crore in the last five days due to pilots strike. The huge cancellations in the booking have give equally significant traffic to the private carriers. While the usual seat factor for these airlines varies between 70-80 per cent during festival season, this went up to 90 per cent due to AI cancellations. “AI will have to offer special fares to attract customers. The carrier has lost about 70,000 passengers in the last five days. They will have to take initiatives to win them back,” Ankur Bhatia, executive director of Bird Group said.
It restarted operating long haul flights including Delhi-Frankfurt-Chicago, Mumbai-Franfurt-Newark, Mumbai-London, Delhi-London, Amritsar-London-Toronto and Ahmedabad-Frankfurt. For domestic routes, it has drawn up a flight restoration plan. It cancelled 111 flights on Wednesday in advance due to non availability of pilots. The flights will be gradually reinstated.
Source: Financial Chronicle
Wednesday, September 30, 2009
No new international routes for now, says Kingfisher Airlines
Kingfisher Airlines on Tuesday said it will not add new international flight routes immediately and also does not plan to take new aircraft deliveries for another two years.
Talking to the media after the annual general meeting of the company, Mr Vijay Mallya, Chairman and CEO, Kingfisher Airlines, said that the private carrier is not looking at expansion of international routes now, but will add frequencies to its existing international sectors such as Thailand, Singapore, London and Dubai.
On the airline’s fund raising plans, Mr Mallya said that the airline has “`drawn only half,” the Rs 2,000-crore it raised from the banks. The UB Group’s President and Chief Financial Officer, Mr Ravi Nedungadi, said the airline expects to “hear back from PE players in early-to-mid October”.
To augment its resources to meet working capital, capital expenditure and general corporate purposes, the company plans to raise funds through rights issue and global depository receipts of $100 million. In all, the company is looking at anywhere “between Rs 800 crore and Rs 1,000 crore”.
Domestically, the airline plans to “look at new routes sometime next year. This year, we will fly to Ludhiana and Pantnagar,” said Mr Mallya. “We need to be cautious in what we do,” he added. Though there is “definite improvement” in business sentiment, he said, “whether it is dramatic improvement or not is questionable. But the decline has stopped.”
The airline, which returned aircraft earlier to shrink domestic capacity, does not plan “to return any more aircraft,” he said. Kingfisher Airlines’ new deliveries will now come only in 2011.
On the employee strife that the sector has been witnessing of late, Mr Mallya said, “Each management needs to deal with its own employees differently. Fortunately, Kingfisher Airlines does not have any such problem. “Any carrier with long-serving employees” should look at the situation and take appropriate action, he added.
Source: The Hindu Business Line
Talking to the media after the annual general meeting of the company, Mr Vijay Mallya, Chairman and CEO, Kingfisher Airlines, said that the private carrier is not looking at expansion of international routes now, but will add frequencies to its existing international sectors such as Thailand, Singapore, London and Dubai.
On the airline’s fund raising plans, Mr Mallya said that the airline has “`drawn only half,” the Rs 2,000-crore it raised from the banks. The UB Group’s President and Chief Financial Officer, Mr Ravi Nedungadi, said the airline expects to “hear back from PE players in early-to-mid October”.
To augment its resources to meet working capital, capital expenditure and general corporate purposes, the company plans to raise funds through rights issue and global depository receipts of $100 million. In all, the company is looking at anywhere “between Rs 800 crore and Rs 1,000 crore”.
Domestically, the airline plans to “look at new routes sometime next year. This year, we will fly to Ludhiana and Pantnagar,” said Mr Mallya. “We need to be cautious in what we do,” he added. Though there is “definite improvement” in business sentiment, he said, “whether it is dramatic improvement or not is questionable. But the decline has stopped.”
The airline, which returned aircraft earlier to shrink domestic capacity, does not plan “to return any more aircraft,” he said. Kingfisher Airlines’ new deliveries will now come only in 2011.
On the employee strife that the sector has been witnessing of late, Mr Mallya said, “Each management needs to deal with its own employees differently. Fortunately, Kingfisher Airlines does not have any such problem. “Any carrier with long-serving employees” should look at the situation and take appropriate action, he added.
Source: The Hindu Business Line
Tuesday, September 29, 2009
Air India blinks, but stir still on
National carrier Air India on Sunday evening announced it was setting up a committee to re-examine the controversial order that had sparked off a strike by its executive pilots. But the pilots still refused to get back to work until the order was entirely withdrawn.
Sunday saw widespread disruption of Air India's flights, with around 30 of them being cancelled as more executive pilots called in sick and refused to report for duty, protest the order. Air India officially admitted to 21 cancellations. The order, announced on September 23, had imposed pay cuts on the pilots. The step followed an austerity drive by the ailing airline, which ran up Rs 7,200 crore (Rs 72 billion) in losses last year.
The airline moved to reconsider the wage cut after howls of protest from passengers grew shrill. The strike had begun on Saturday when 13 flights were cancelled. "The number of flights to be operated on Monday is yet to be decided, depending on passenger turnout and load factor;' said an Air India spokesman.
He said the airline was in talks with Jet Airways and IndiGo Air to carry its passengers if the need arises.
The official figure puts the cut in productivity-linked incentives, called flying allowance for pilots, at 25 to 50 per cent, but pilots say there are hidden factors that make the cut deeper, at about 70 per cent.
Air India chairman Arvind Jadhav met executive pilots in Mumbai. Captain VK Bhalla, representing executive pilots in Delhi, said the protest leave was against non-payment of allowances for three months and steep cuts.
“The protest continues. We want a complete reversal of the order,” he said. “If the pilots do not report to work, the worst case scenario will be a lockout,” said a Ministry of Civil Aviation official. “There was one in the 1970s which lasted 17 days.” An aide to civil aviation minister Praful Patel, however, said such a step was improbable.
Source: Hindustan Times
Sunday saw widespread disruption of Air India's flights, with around 30 of them being cancelled as more executive pilots called in sick and refused to report for duty, protest the order. Air India officially admitted to 21 cancellations. The order, announced on September 23, had imposed pay cuts on the pilots. The step followed an austerity drive by the ailing airline, which ran up Rs 7,200 crore (Rs 72 billion) in losses last year.
The airline moved to reconsider the wage cut after howls of protest from passengers grew shrill. The strike had begun on Saturday when 13 flights were cancelled. "The number of flights to be operated on Monday is yet to be decided, depending on passenger turnout and load factor;' said an Air India spokesman.
He said the airline was in talks with Jet Airways and IndiGo Air to carry its passengers if the need arises.
The official figure puts the cut in productivity-linked incentives, called flying allowance for pilots, at 25 to 50 per cent, but pilots say there are hidden factors that make the cut deeper, at about 70 per cent.
Air India chairman Arvind Jadhav met executive pilots in Mumbai. Captain VK Bhalla, representing executive pilots in Delhi, said the protest leave was against non-payment of allowances for three months and steep cuts.
“The protest continues. We want a complete reversal of the order,” he said. “If the pilots do not report to work, the worst case scenario will be a lockout,” said a Ministry of Civil Aviation official. “There was one in the 1970s which lasted 17 days.” An aide to civil aviation minister Praful Patel, however, said such a step was improbable.
Source: Hindustan Times
Friday, September 25, 2009
Kingfisher Airlines adds 52 lakh shares in OI
Kingfisher Airlines ended up 6% with a buildup of 52 lakh shares in open interest for the October series. IFCI ended down nearly 1.7% with a buildup of nearly 3 crore shares in open interest.
The Nifty futures is seen rollover about 65%; 6-7% appreciation seen in the last series which was September Series.
In the last few days there was some unwinding pressure coming from 5,000-5,100 but slowly we saw today there was some short covering happening throughout the day. At one point of time we were trading at a 10-15% discount and at the end we would just see October futures ended at around 15 month premium clearly signifying that there has been a huge short covering seen in the futures.
The next series remains at 4,900 as base because that is the level used for trading the Nifty in the next series and on the upper side its 5,100 which is the region which is worked 4,900-5,100 in the next series.
Stock specifics Kingfisher Airlines, ended up 6% with a good buildup happening in the next series, nearly 52 lakh is the addition, which we saw in the October series and a good rollover of nearly 80%, after a long time we have seen airline stocks which such a good roll.
Also the PSU banks starting form Vijaya bank, Dena Bank, UCO Bank all the stocks which are flaring up any where between 5-10% saw a huge buildup happening in. Vijaya Bank was up nearly 6.5% with a good buildup of nearly 58 lakh shares happening in and you can see mammoth rollovers on all these PSU banks at around 87%.
JP Associates is one stock where we saw short covering happening in the day. During the day it was down 3% but it ended up nearly 1.5%, it recovered nearly 4.5% from the day’s low and we saw a buildup of nearly 70 lakh shares happening in, the rollovers also pushed up to 75% on this stock.
IFCI ended down nearly 1.7% with a buildup of nearly 3 crore shares, which was seen in the next series for a net buildup of nearly 1.3 crore shares seen on this stock.
Source: MoneyControl
The Nifty futures is seen rollover about 65%; 6-7% appreciation seen in the last series which was September Series.
In the last few days there was some unwinding pressure coming from 5,000-5,100 but slowly we saw today there was some short covering happening throughout the day. At one point of time we were trading at a 10-15% discount and at the end we would just see October futures ended at around 15 month premium clearly signifying that there has been a huge short covering seen in the futures.
The next series remains at 4,900 as base because that is the level used for trading the Nifty in the next series and on the upper side its 5,100 which is the region which is worked 4,900-5,100 in the next series.
Stock specifics Kingfisher Airlines, ended up 6% with a good buildup happening in the next series, nearly 52 lakh is the addition, which we saw in the October series and a good rollover of nearly 80%, after a long time we have seen airline stocks which such a good roll.
Also the PSU banks starting form Vijaya bank, Dena Bank, UCO Bank all the stocks which are flaring up any where between 5-10% saw a huge buildup happening in. Vijaya Bank was up nearly 6.5% with a good buildup of nearly 58 lakh shares happening in and you can see mammoth rollovers on all these PSU banks at around 87%.
JP Associates is one stock where we saw short covering happening in the day. During the day it was down 3% but it ended up nearly 1.5%, it recovered nearly 4.5% from the day’s low and we saw a buildup of nearly 70 lakh shares happening in, the rollovers also pushed up to 75% on this stock.
IFCI ended down nearly 1.7% with a buildup of nearly 3 crore shares, which was seen in the next series for a net buildup of nearly 1.3 crore shares seen on this stock.
Source: MoneyControl
Wednesday, September 23, 2009
Low-fare airlines offer sops to attract fliers
With full-service airlines making inroads into the low-fare airspace, existing budget carriers are going beyond price advantage and handing out sops to attract and keep passengers. These carriers are either giving away gifts or offering discounts at hotels, restaurants, and retail stores against boarding passes.
Low-fare carriers such as IndiGo (run by InterGlobe Aviation Pvt. Ltd), SpiceJet Ltd, GoAir (GoAirlines (India) Pvt. Ltd) and JetLite (India) Ltd, consider this the most effective way to counter loyalty programmes that are being offered by full-service rivals.
Jet Airways (India) Ltd, Kingfisher Airlines Ltd, National Aviation Co of India Ltd (which runs Air India) and Paramount Airways Ltd are full-service carriers and run loyalty programmes that offer flying miles based on how often a passenger uses the carrier.
“Budget airlines find innovative ways in providing value adds to the customer and the customer is also happy with such offers as they feel that there is a value addition to be got while travelling with carriers that provide them with shopping vouchers,” Neelu Singh, chief operating officer of online travel agent firm, Ezeego1.com.
India’s largest low-fare carrier IndiGo has announced a 20% saving on the prepaid in-flight meal if a passenger books tickets online. In the prepaid excess baggage option, too, the airline has offered a discount of up to 25% on luggage weighing between 10kg and 25kg.
Last week, SpiceJet launched its Privilege Pass Programme that allows travellers to avail special benefits from partner hotels against a used boarding pass. Benefits range from complimentary meals worth Rs1,500 or a discount of Rs500 on their total hotel billing. The partner includes Trident Hotels, Ista Hotels, Keys Hotels, Pride Hotels, Maidens Hotels, Rain Tree Hotels, JHM Interstate and The Park.
GoAir in early September ran an offer of gifts worth Rs3,000 on tickets sold through 20 September. The gift catalogue includes men’s watches and ties, and an oval pearl jewellery set for women.
JetLite, the low-fare unit of full service Jet Airways, is also offering discounts of up to 20% on car rentals with Avis and Hertz, dining, retail stores, and Lemon Tree and Marriott International hotels.
“Low-fare carriers are trying to stimulate the market by offering add on benefits for passengers… (and) are pulling up their socks since full-service carriers are increasing their exposure to low-fare space,” said a senior executive with a Delhi-based low-fare airline. He did not want to be identified. With the festival season already under way, airlines are also expecting greater traffic that they wish to capitalize on, he added.
In August, domestic airlines carried 26% more passengers than in the same period last year, helped largely by cheaper fares and a gradually reviving economy, despite the fact that it is generally considered among the leanest months for traffic.
“With the introduction of these simple yet relevant services, we just upped the cool quotient of our passengers,” said Aditya Ghosh, president, IndiGo. “We see these as value adds to our customer experience. One of the three things that we stand for is a hassle free experience.” However, he conceded that he didn’t see an immediate boost for traffic from these measures.
Source: Mint
Low-fare carriers such as IndiGo (run by InterGlobe Aviation Pvt. Ltd), SpiceJet Ltd, GoAir (GoAirlines (India) Pvt. Ltd) and JetLite (India) Ltd, consider this the most effective way to counter loyalty programmes that are being offered by full-service rivals.
Jet Airways (India) Ltd, Kingfisher Airlines Ltd, National Aviation Co of India Ltd (which runs Air India) and Paramount Airways Ltd are full-service carriers and run loyalty programmes that offer flying miles based on how often a passenger uses the carrier.
“Budget airlines find innovative ways in providing value adds to the customer and the customer is also happy with such offers as they feel that there is a value addition to be got while travelling with carriers that provide them with shopping vouchers,” Neelu Singh, chief operating officer of online travel agent firm, Ezeego1.com.
India’s largest low-fare carrier IndiGo has announced a 20% saving on the prepaid in-flight meal if a passenger books tickets online. In the prepaid excess baggage option, too, the airline has offered a discount of up to 25% on luggage weighing between 10kg and 25kg.
Last week, SpiceJet launched its Privilege Pass Programme that allows travellers to avail special benefits from partner hotels against a used boarding pass. Benefits range from complimentary meals worth Rs1,500 or a discount of Rs500 on their total hotel billing. The partner includes Trident Hotels, Ista Hotels, Keys Hotels, Pride Hotels, Maidens Hotels, Rain Tree Hotels, JHM Interstate and The Park.
GoAir in early September ran an offer of gifts worth Rs3,000 on tickets sold through 20 September. The gift catalogue includes men’s watches and ties, and an oval pearl jewellery set for women.
JetLite, the low-fare unit of full service Jet Airways, is also offering discounts of up to 20% on car rentals with Avis and Hertz, dining, retail stores, and Lemon Tree and Marriott International hotels.
“Low-fare carriers are trying to stimulate the market by offering add on benefits for passengers… (and) are pulling up their socks since full-service carriers are increasing their exposure to low-fare space,” said a senior executive with a Delhi-based low-fare airline. He did not want to be identified. With the festival season already under way, airlines are also expecting greater traffic that they wish to capitalize on, he added.
In August, domestic airlines carried 26% more passengers than in the same period last year, helped largely by cheaper fares and a gradually reviving economy, despite the fact that it is generally considered among the leanest months for traffic.
“With the introduction of these simple yet relevant services, we just upped the cool quotient of our passengers,” said Aditya Ghosh, president, IndiGo. “We see these as value adds to our customer experience. One of the three things that we stand for is a hassle free experience.” However, he conceded that he didn’t see an immediate boost for traffic from these measures.
Source: Mint
Tuesday, September 22, 2009
Ground handlers' stir hits Kingfisher
A strike by the ground handling staff of Kingfisher Airlines on Monday saw most of its flights delayed by 30 minutes to one hour through the day. The staff reportedly refused to work on the ground of non-payment of outstanding dues by the airline.
According to sources, the ground handlers called for a one day strike and hence several of them did not report for work on Monday. Even though other airline staff jumped in to salvage the situation, almost all flights were delayed by up to an hour. Ground handlers are responsible for almost all non-technical work of an airline, including loading and unloading of baggage from the aircraft, driving of trolleys, etc.
While sources claimed that the issue was of non-payment of dues by the airline itself, Kingfisher officials said the issue was between the loaders and the previous ground handling agency (GHA) that the airline had employed. "We terminated the contract of the previous ground handling agency and many of their workers were absorbed by the new agency that is working for us. A section of loaders who were employed by our earlier GHA and who are currently on the rolls of our new GHA have a dispute with the earlier GHA. The dispute appears to pertain to arrears of back wages payable by the erstwhile GHA. This is a matter between the loaders and the erstwhile GHA and we understand that there is a move by the loaders to approach the labour court for appropriate relief,'' said a Kingfisher Airlines spokesperson.
The official added: "We are doing our best to avoid and minimise any inconvenience on account of this move on the part of the loaders and we expect the situation to be resolved very quickly."
Source: Times of India
According to sources, the ground handlers called for a one day strike and hence several of them did not report for work on Monday. Even though other airline staff jumped in to salvage the situation, almost all flights were delayed by up to an hour. Ground handlers are responsible for almost all non-technical work of an airline, including loading and unloading of baggage from the aircraft, driving of trolleys, etc.
While sources claimed that the issue was of non-payment of dues by the airline itself, Kingfisher officials said the issue was between the loaders and the previous ground handling agency (GHA) that the airline had employed. "We terminated the contract of the previous ground handling agency and many of their workers were absorbed by the new agency that is working for us. A section of loaders who were employed by our earlier GHA and who are currently on the rolls of our new GHA have a dispute with the earlier GHA. The dispute appears to pertain to arrears of back wages payable by the erstwhile GHA. This is a matter between the loaders and the erstwhile GHA and we understand that there is a move by the loaders to approach the labour court for appropriate relief,'' said a Kingfisher Airlines spokesperson.
The official added: "We are doing our best to avoid and minimise any inconvenience on account of this move on the part of the loaders and we expect the situation to be resolved very quickly."
Source: Times of India
Wednesday, September 16, 2009
Air India joins discount race, cuts domestic fares 20-46%
While a strike is on, air passengers suffer. But once it is over they get a bonanza, even if only for a few days. The end of the five-day agitation by Jet Airways’ pilots, which affected normal flight operations, first led to the airline cutting by 50 per cent the economy class fares on its domestic flights for three days. This forced the other airlines to follow suit.
The latest to join the bandwagon is the state-owned Air India (Domestic), which has reduced its fares by 20-46 per cent on seven routes, including Delhi-Mumbai, Delhi-Hyderabad, Delhi-Chennai and Mumbai-Nagpur. To enjoy these low fares, passengers have to complete their journey by September 18.
Air India (Domestic) will offer a one-way fare of Rs 3,329 on all flights between Delhi and Hyderabad and Hyderabad and Delhi, which works out to a discount of 46.6 per cent; the lowest fare on offer earlier was Rs 6,049.
Similarly, a one-way ticket on all flights on the Mumbai-Nagpur-Mumbai sector will be available for Rs 3,079. The airline is also offering a reduced fare of Rs 2,729 on seven of the daily flights between Delhi and Mumbai and eight of the daily flights between Mumbai and Delhi.
On this sector, the reduction is almost 26 per cent, as the earlier lowest normal fare was Rs 3,679.
Sources indicated that on Monday low-cost airline GoAir dropped fares to match those offered by Jet Airways. Travel portals have also been offering one-way tickets on various domestic airlines at rock-bottom prices.
Discount period
On Tuesday evening, Jet Airways made it clear that it will not be extending the discounted fare offer beyond September 18.
“The 50 per cent discount fare initiative for three days was our way of apologising to all our loyal guests for the inconvenience caused by the recent events. We will not be extending it…” the Chief Commercial Officer, Mr Sudheer Raghavan, said.
The airline also considered reducing business class fares on select flights for a limited period but eventually decided against it.
A statement issued by the airline announcing the reduction in business class fares was withdrawn shortly after it was issued on Monday. The decision to lower fares comes at a time when there has been a 26 per cent growth in the number of passengers that the domestic airlines carried in August compared with the previous month.
Source: The Hindu Business Line
The latest to join the bandwagon is the state-owned Air India (Domestic), which has reduced its fares by 20-46 per cent on seven routes, including Delhi-Mumbai, Delhi-Hyderabad, Delhi-Chennai and Mumbai-Nagpur. To enjoy these low fares, passengers have to complete their journey by September 18.
Air India (Domestic) will offer a one-way fare of Rs 3,329 on all flights between Delhi and Hyderabad and Hyderabad and Delhi, which works out to a discount of 46.6 per cent; the lowest fare on offer earlier was Rs 6,049.
Similarly, a one-way ticket on all flights on the Mumbai-Nagpur-Mumbai sector will be available for Rs 3,079. The airline is also offering a reduced fare of Rs 2,729 on seven of the daily flights between Delhi and Mumbai and eight of the daily flights between Mumbai and Delhi.
On this sector, the reduction is almost 26 per cent, as the earlier lowest normal fare was Rs 3,679.
Sources indicated that on Monday low-cost airline GoAir dropped fares to match those offered by Jet Airways. Travel portals have also been offering one-way tickets on various domestic airlines at rock-bottom prices.
Discount period
On Tuesday evening, Jet Airways made it clear that it will not be extending the discounted fare offer beyond September 18.
“The 50 per cent discount fare initiative for three days was our way of apologising to all our loyal guests for the inconvenience caused by the recent events. We will not be extending it…” the Chief Commercial Officer, Mr Sudheer Raghavan, said.
The airline also considered reducing business class fares on select flights for a limited period but eventually decided against it.
A statement issued by the airline announcing the reduction in business class fares was withdrawn shortly after it was issued on Monday. The decision to lower fares comes at a time when there has been a 26 per cent growth in the number of passengers that the domestic airlines carried in August compared with the previous month.
Source: The Hindu Business Line
Tuesday, September 15, 2009
Air India pact with Singapore Air
Air India and Singapore Airlines have signed a bilateral agreement that would enable passengers of either carrier to earn and redeem miles on flights operated by the other.
Under the new agreement, effective from tomorrow, frequent flyers on Singapore Airlines and Air India would be able to earn and redeem miles on flights operated by either carrier.
The agreement comes in the wake of efforts by the national carrier to fulfil the conditions of joining the Star Alliance of which SIA is a founder member. Air India has already been invited to join the global alliance, which was formed in 1997 and has a membership of 26. The agreement means that members of SIA's KrisFlyer programme would be able to earn KrisFlyer miles when they fly with Air India, or choose to redeem their miles for flights with the Indian carrier, an SIA statement said here.
Likewise, members of Air India’s Flying Returns programme would enjoy greater choice by having the option of using their miles on the Singaporean carrier or earning miles when they fly on it, it said.
“Singapore Airlines is pleased to welcome Air India on board. The addition of Air India as a KrisFlyer partner boosts the number of carriers we have such agreements with to 28," it said.
“Those who fly frequently with Singapore Airlines and Air India now have more opportunity to increase their frequent flyer miles, and more choice in deciding how best to use their miles,” Mr Huang Cheng Eng, Singapore Airlines executive vice-president (marketing and the regions) said.
SIA operates 42 times a week to six destinations in India. With the inclusion of subsidiary carrier SilkAir, the Singapore Airlines route network covers 93 destinations in 38 countries.
Source: The Statesman
Under the new agreement, effective from tomorrow, frequent flyers on Singapore Airlines and Air India would be able to earn and redeem miles on flights operated by either carrier.
The agreement comes in the wake of efforts by the national carrier to fulfil the conditions of joining the Star Alliance of which SIA is a founder member. Air India has already been invited to join the global alliance, which was formed in 1997 and has a membership of 26. The agreement means that members of SIA's KrisFlyer programme would be able to earn KrisFlyer miles when they fly with Air India, or choose to redeem their miles for flights with the Indian carrier, an SIA statement said here.
Likewise, members of Air India’s Flying Returns programme would enjoy greater choice by having the option of using their miles on the Singaporean carrier or earning miles when they fly on it, it said.
“Singapore Airlines is pleased to welcome Air India on board. The addition of Air India as a KrisFlyer partner boosts the number of carriers we have such agreements with to 28," it said.
“Those who fly frequently with Singapore Airlines and Air India now have more opportunity to increase their frequent flyer miles, and more choice in deciding how best to use their miles,” Mr Huang Cheng Eng, Singapore Airlines executive vice-president (marketing and the regions) said.
SIA operates 42 times a week to six destinations in India. With the inclusion of subsidiary carrier SilkAir, the Singapore Airlines route network covers 93 destinations in 38 countries.
Source: The Statesman
Monday, September 14, 2009
Jet Airways to operate at full capacity from today
The five-day agitation by Jet Airways pilots owing allegiance to the National Aviators’ Guild was called off on Sunday morning after hectic talks between the management and Guild officials.
The pilots, including the four who were sacked, will resume duties. All international flights will resume immediately, and domestic flights by Monday afternoon.
A Jet Airways statement said an amicable agreement was reached and, effective Sunday, the airline would operate its full schedule of services in all sectors, with all crew members reporting for their normal rostered duties.
Prior to the stand-off, Jet’s revenue was around $8 million a day (Rs. 40 crore). It has lost Rs. 200 crore in five days. On an average, Jet carries 23,000 passengers a day, but bookings dropped to 14,000 on September 8, and further down to 7,000 by September 12.
Addressing journalists, Jet Executive Director Saroj Dutta said that after the discussions, a consultative group was put in place. It would include two Jet Airways Board members, the CEO, two representatives of flight operations and five representatives of the pilots. Captain Girish Kaushik, president of the Guild, apologised to the passengers for the hardship they faced and thanked the management for taking back the four sacked pilots.
Mr. Dutta said the consultative body would address the issues of the management and pilots in every area of concern. “It will deal with almost all issues one would normally expect a union to deal with the management. There is no need for a union at all, as the consultative body will address all issues. However, we have just set up the body and are yet to work out the terms of reference.”
Jet’s Chief Commercial Officer Sudheer Raghavan told The Hindu: “We have immediately started international operations because most bookings were made more than a month ago. For domestic operations, all flights and pilots are available, but because of the situation and because bookings are made a week in advance, we will be operating at full capacity from late afternoon tomorrow [Monday]. In the past few hours though, there has been a ferocious rush for bookings.”
Source: The Hindu
The pilots, including the four who were sacked, will resume duties. All international flights will resume immediately, and domestic flights by Monday afternoon.
A Jet Airways statement said an amicable agreement was reached and, effective Sunday, the airline would operate its full schedule of services in all sectors, with all crew members reporting for their normal rostered duties.
Prior to the stand-off, Jet’s revenue was around $8 million a day (Rs. 40 crore). It has lost Rs. 200 crore in five days. On an average, Jet carries 23,000 passengers a day, but bookings dropped to 14,000 on September 8, and further down to 7,000 by September 12.
Addressing journalists, Jet Executive Director Saroj Dutta said that after the discussions, a consultative group was put in place. It would include two Jet Airways Board members, the CEO, two representatives of flight operations and five representatives of the pilots. Captain Girish Kaushik, president of the Guild, apologised to the passengers for the hardship they faced and thanked the management for taking back the four sacked pilots.
Mr. Dutta said the consultative body would address the issues of the management and pilots in every area of concern. “It will deal with almost all issues one would normally expect a union to deal with the management. There is no need for a union at all, as the consultative body will address all issues. However, we have just set up the body and are yet to work out the terms of reference.”
Jet’s Chief Commercial Officer Sudheer Raghavan told The Hindu: “We have immediately started international operations because most bookings were made more than a month ago. For domestic operations, all flights and pilots are available, but because of the situation and because bookings are made a week in advance, we will be operating at full capacity from late afternoon tomorrow [Monday]. In the past few hours though, there has been a ferocious rush for bookings.”
Source: The Hindu
Friday, September 11, 2009
Don’t make profit on stranded passengers, DGCA tells airlines
The aviation safety regulator, Directorate General of Civil Aviation, came down heavily on the airlines tonight, telling them to keep fares at last week’s level, following reports that airlines were charging more in the wake of strike by Jet pilots. In a letter to all airlines, the Directorate General of Civil Aviation said quoting media reports that airlines were making money by charging high fares from stranded passengers of Jet Airways, which is on an average cancelling 200 flights every day for the past three days due to strike by its pilots.
It asked the airlines not to charge “very” high airfares but keep the fares at the last week’s level. The jet strike is reported to have impacted around 13,000 passengers, affecting domestic operations severely on key metro routes.
It is on these routes that the low-cost airlines and other full-service carriers hiked the prices. The starting fares on the Delhi-Mumbai route, between Rs 2,500 and Rs 4,000 on a low-cost airline, were reported to be around Rs 4,500 on Wednesday. In some cases, the prices went as high as Rs 12,000. A day before, on Tuesday, too, low-cost carriers such as Indigo, GoAir and Kingfisher Red flew passengers at a price of Rs 3,800 to Rs 5,200 on the metro route.
The civil aviation ministry had earlier directed the airlines to ensure that least inconvenience is caused to passengers and they be accommodated on other carriers. State carrier Air India denied any charges of hiking fares. An Air India official told The Indian Express that the carrier had not effected any change in its prices and was following the normal pricing. “The pricing of tickets, as usual, depends on the occupancy level in our aircraft. Pricing is determined by the flight reservation systems.” Air India said that it would deploy additional aircraft and crew if need arose.
“September being a lean season, there is already overcapacity in the market. The question of hiking fares does not arise,” the official said. The civil aviation ministry, which has so far refused to intervene on the issue of the pilots’ strike, calling it a matter between the management and the pilots, maintained that the passenger inconvenience should be minimised.
Source: The Indian Express
It asked the airlines not to charge “very” high airfares but keep the fares at the last week’s level. The jet strike is reported to have impacted around 13,000 passengers, affecting domestic operations severely on key metro routes.
It is on these routes that the low-cost airlines and other full-service carriers hiked the prices. The starting fares on the Delhi-Mumbai route, between Rs 2,500 and Rs 4,000 on a low-cost airline, were reported to be around Rs 4,500 on Wednesday. In some cases, the prices went as high as Rs 12,000. A day before, on Tuesday, too, low-cost carriers such as Indigo, GoAir and Kingfisher Red flew passengers at a price of Rs 3,800 to Rs 5,200 on the metro route.
The civil aviation ministry had earlier directed the airlines to ensure that least inconvenience is caused to passengers and they be accommodated on other carriers. State carrier Air India denied any charges of hiking fares. An Air India official told The Indian Express that the carrier had not effected any change in its prices and was following the normal pricing. “The pricing of tickets, as usual, depends on the occupancy level in our aircraft. Pricing is determined by the flight reservation systems.” Air India said that it would deploy additional aircraft and crew if need arose.
“September being a lean season, there is already overcapacity in the market. The question of hiking fares does not arise,” the official said. The civil aviation ministry, which has so far refused to intervene on the issue of the pilots’ strike, calling it a matter between the management and the pilots, maintained that the passenger inconvenience should be minimised.
Source: The Indian Express
Thursday, September 10, 2009
Ticket prices up as passengers switch flights
The strike by Jet pilots and the upcoming festival season is likely to burn a huge hole in pockets of air passengers. With Jet cancelling 40 outbound flights from Delhi on the second day of the pilots’ strike, air fares shot up with many airlines more than doubling cost of tickets. Thanks to the recession, air fares had been high of late and with many festivals not even a month away, passengers are in for some heavy-duty spending.
Sultana came to Delhi from Saharanpur with her husband Dilshad and child to take a flight to Mumbai, where her father expired on Wednesday morning. The woman, who did not have enough money on her, was told at the counter of a private airline that she would have to pay Rs 7,800 for all three. Lacking cash, she left for a relative’s home and returned in the afternoon with the money. However,she was in for a shock when she went to the counter and was told that the ticket for one person had gone up to Rs 8,000.
During morning and evening peak traffic hours, ticket prices touched the roof. While Sultana had to turn back and try booking a train ticket, there were others who could not afford to wait and had to purchase whatever was offered. A foreign national was sold a Rs 12,500 seat to Ahmedabad on a private airline. The web price for the same ticket is about Rs 2,200. A ticket for Mumbai touched Rs 11,000 by late afternoon for the evening flight.
While airline sources confirmed that prices would not have been so high on ordinary days, no officials were willing to comment on the situation. Passengers who chose to take Jet Airway’s offer of flying on another airline had to pay no extra charges but those who preferred to purchase tickets themselves had a tough time finding reasonably priced tickets.
An airline official explained that while airlines did not incur higher costs, they increased the number of tickets under higher slabs. ‘‘All airlines have different price slabs for a certain percentage of tickets. Normally, the earlier one purchases a ticket, the cheaper it will be. A ticket bought off the counter just before departure would be the most expensive as passengers would obviously be doing so in an emergency. All use a software that carries out dynamic pricing. Depending on how many tickets are left on a flight, the computer automatically fixes slabs for tickets,’’ he said.
In the present situation, experts explained that more tickets had been placed under the higher slabs as most passengers stranded at the airport were purchasing whatever was available. ‘‘Even now many flights are not going with a full load but it would still be more profitable for airlines to sell more expensive tickets rather than sell more tickets,’’ revealed sources.
Source: The Times of India
Sultana came to Delhi from Saharanpur with her husband Dilshad and child to take a flight to Mumbai, where her father expired on Wednesday morning. The woman, who did not have enough money on her, was told at the counter of a private airline that she would have to pay Rs 7,800 for all three. Lacking cash, she left for a relative’s home and returned in the afternoon with the money. However,she was in for a shock when she went to the counter and was told that the ticket for one person had gone up to Rs 8,000.
During morning and evening peak traffic hours, ticket prices touched the roof. While Sultana had to turn back and try booking a train ticket, there were others who could not afford to wait and had to purchase whatever was offered. A foreign national was sold a Rs 12,500 seat to Ahmedabad on a private airline. The web price for the same ticket is about Rs 2,200. A ticket for Mumbai touched Rs 11,000 by late afternoon for the evening flight.
While airline sources confirmed that prices would not have been so high on ordinary days, no officials were willing to comment on the situation. Passengers who chose to take Jet Airway’s offer of flying on another airline had to pay no extra charges but those who preferred to purchase tickets themselves had a tough time finding reasonably priced tickets.
An airline official explained that while airlines did not incur higher costs, they increased the number of tickets under higher slabs. ‘‘All airlines have different price slabs for a certain percentage of tickets. Normally, the earlier one purchases a ticket, the cheaper it will be. A ticket bought off the counter just before departure would be the most expensive as passengers would obviously be doing so in an emergency. All use a software that carries out dynamic pricing. Depending on how many tickets are left on a flight, the computer automatically fixes slabs for tickets,’’ he said.
In the present situation, experts explained that more tickets had been placed under the higher slabs as most passengers stranded at the airport were purchasing whatever was available. ‘‘Even now many flights are not going with a full load but it would still be more profitable for airlines to sell more expensive tickets rather than sell more tickets,’’ revealed sources.
Source: The Times of India
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