'Fares cut, why not surcharge'

Mumbai: Aviation turbine fuel prices have hit the bottom of the barrel, at Rs 32-38 a litre it is at its lowest level in the last four to five years. Then why are air travellers still paying a fuel surcharge, a levy imposed by airlines way back in 2006 to offset the impact of then-skyrocketing oil prices?
It is a question most flyers and consumer rights organisations are asking, as ATF prices are now much lower than in 2006.
Though several airlines recently reduced air fares on domestic routes, fare cuts which they said were due to lower ATF prices, the cut was in the basic fares and not the fuel surcharge. However, the fuel surcharge is always increased every time there is a rise in ATF prices.
"Even a 90 per cent cut in basic fare would not bring as much drop in fare as say a 10 or 20 per cent cut in fuel surcharge. For instance, a Spice Jet air ticket (a really cheap one) for a Mumbai-Delhi flight for January 2, 2009, is Rs 3,678. Out of this the base fare is Rs 745, fuel surcharge is Rs 2,700 and passenger service fee is Rs 233,'' says Abhay Suri, a frequent flyer.
In December 2005, when ATF cost more than what it costs now, a Mumbai-Delhi low-cost carrier's ticket came at Rs 1,000. Even last December, when fuel the surcharge was Rs 1,650, mid-week tickets on this route started at a low of Rs 1,900.
On December 29, Jet Airways announced a cut in basic fares, while Air India followed suit the next day.
Earlier this month, Air India, Jet Airways, Kingfisher Airlines and Indigo had cut fuel surcharge by a measly Rs 200-400 per passenger. The move came as crude prices plunged to $46 a barrel from $147 a barrel in July 2008.
Air India, Kingfisher and Jet brought down their fuel surcharges from Rs 2,350 per passenger on routes with a distance of less than 750 km and Rs 3,100 per passenger on routes over 750 km to Rs 1,950 per passenger and Rs 2700 per passenger respectively.
Kingfisher Red and IndiGo have pruned fuel surcharges from Rs 2,250 per passenger on short-haul flights and Rs 2,900 per passenger on long-haul flights to Rs 1,950 per passenger and Rs 2,700 per passenger respectively.
In October, IndiGo had done away with the congestion fee of Rs 150 as well as the transaction fee of Rs 50. It had also reduced its basic fares by around 50 per cent.
01/01/09 Manju V/Times of India

Fares down, airlines hope to woo back passengers

Chandigarh With the airline companies slashing ticket fares across the country by 30 to 52 per cent, air travel from Chandigarh to different destinations is set to get cheaper.
While the NACIL-I (the Air India division of the National Aviation Company of India Limited) reduced its fare on domestic sectors by around 52 per cent, Jet Airways slashed its basic fares by up to 40 per cent.
In a separate decision, the Air India has introduced a lower fare of Rs 3,925 on a 14-day advance booking from Chandigarh to Mumbai. The same route will cost Rs 4,425 when booked seven days in advance.
The Chandigarh-Delhi 14-day advance booking for the economy class will cost Rs 2,975, inclusive of all taxes.
Kingfisher Airlines was the first to announce a cut in its fares, to be implemented from January 1.
Bringing cheer to the passengers on the most preferred routes from the city — Delhi and Mumbai — the fare was slashed by as much as Rs 2,000. “It is expected that the revised fares will be able to draw passengers back to air travel,” said an official of Jet Airways.
Over the past four months, there has been a sharp decline in the prices of aviation fuel. Earlier this month, a few air carriers reduced the fuel surcharge on the ticket price.
01/01/09 ExpressIndia

Indian Doctor helps deliver baby on trans-Atlantic flight

It's safe to say that Dr. Natarajan Raman, a radiation oncologist from Woodbury, doesn't usually get to deliver happy news like he did Wednesday morning.
"I'm usually dealing with patients at the end of life, so it was a very pleasant surprise dealing with the beginning of life," he said. "But I'm not planning to switch specialties."
Raman was on his way home from a trip to India when he helped deliver a baby girl on Northwest Airlines flight 59 from Amsterdam to Boston. As the plane soared over Canada, he was sipping a cup of tea and reading the newspaper when a call for any medical personnel came across the intercom.
A young woman was having contractions and was ready to give birth. Raman, who works at Hennepin County Medical Center, and a doctor from Massachusetts, Paresh Thakker, told the pilot that the baby would likely be delivered before the plane could make an emergency landing. They used the plane's emergency medical kit and the baby girl was born about 10 minutes later.
Even though it had been almost 20 years since he delivered a baby, Raman, who had been in India attending his 25th medical school reunion, said his memory was still intact.
The flight landed at 10:29 a.m., about 90 minutes after the baby was born. The mother and baby were transported to Massachusetts General Hospital, where they were in good condition.
Chris Kelly, a spokesperson for Delta Air Lines, which acquired Northwest in October, said the company does not impose travel restrictions on pregnant women, though it recommends that women in their eighth month of pregnancy consult a doctor before flying.
31/12/08 Lora Pabst/Minneapolis Star Tribune, USA

Pilot quick to avert disaster

Kolkata: An alert pilot of Air India's Haj flight today helped avert a possible disaster at NSC Bose Airport this morning.
The Boeing-747 flight carrying 449 haj pilgrims from Jeddah was about to land in three minutes when the pilot noticed another aircraft on the same runway and contacted the Air Traffic Control (ATC) officers alerting them to it. There was poor visibility and planes were landing under CAT-II ILS conditions. The ATC officers immediately contacted the pilot of the Alliance Air's cargo flight that was on the runway. The cargo flight, IC-7901 was carrying mails to Guwahati.
The ATCOs immediately asked the Air India's pilot to go around it, which he did. Then the pilot of AA's flight, who entered the runway through Alfa Taxi Track, was asked to vacate the runway. He was asked to take off. The run way was vacated. The Air India flight landed safely after 20 minutes. The matter is being probed by safety officials of the Directorate General of Civil Aviation.
31/12/08 The Statesman

Kingfisher grounds 20% flights

Bangalore: Kingfisher Airlines, India's second-largest airline, has slashed 20 per cent of its domestic flights and is now operating around 440 flights. The company, which recently started its overseas flight connecting Bangalore to London, is also understood to be initiating discussions with Singapore Airlines for a code-sharing pact. The airline recently got the required nod for increasing its overseas flights by connecting Mumbai to Hong Kong and Singapore; and Bangalore to Colombo, Male and Dubai.
Industry sources indicate that Kingfisher’s Bangalore-London flight is operating at a little over 50 per cent load factor and the basic drawback on this operation is that there are no adequate connecting flights for a seamless travel. While the company did confirm that it has slashed 20 per cent of its domestic flights and its Bangalore-London flight is operating at a 50 per cent load factor, it offered not to comment on the code sharing discussions. The company is going through a overhaul of its intended plans to fly overseas even as it cancelled its much discussed direct flights to San Francisco from Bangalore.
The airline, which is hoping to be operationally profitable for the month of December, is understood to have leveraged debt more than 10 times on an equity base of Rs 256 crore, even as it tries to raise Rs 1,600 crore through equity dilution.
01/01/09 Raghuvir Badrinath/Business Standard

AI aims to win back market leadership: CMD

New Delhi: With Jet and Kingfisher striking an alliance, the fight among full service carriers of India had become rather dull as the national carrier was just seeing its domestic market share drop relentlessly ever since the merger of Indian Airlines and Air India in late 2007. But the mild-mannered CMD of the merged entity, Raghu Menon, suddenly announced the airline's intention of striking a comeback by substantially reducing airfares by 10% to 45% on Tuesday.
Now with a combination of genuinely low airfares and brand new aircraft, Menon has made a New Year resolution to lure back passengers lost to other carriers and make AI (domestic) the market leader again in coming months. In fact, he did not even rule out possibility of further fare cuts, if oil continued its downward journey in 2009.
Asked how an airline that lost about Rs 2,300 crore last fiscal and may end up with double that figure this time could strike a balance between its revenue requirement and the announced fare cuts, Menon told TOI on Wednesday: "We were guided more by fact that fuel prices have come down sharply. Although AI had taken the lead in November by reducing fuel surcharge by Rs 400, that was not enough. We wanted to offer a substantial concession despite the fact that airlines are still facing financial difficulties. It has become important to revive travel, both leisure and corporate."
In fact he added that if oil prices do not defy gravity again, AI could break even or "even be positive" in 2009-10.
01/01/09 Saurabh Sinha/Times of India

AI offers free travel for spouse

Mumbai: Riding on the wave of reduced oil prices, Air India, on the lines of its Companion Free Scheme available on its West-bound international flights, has introduced a new scheme extending free travel for a passenger's spouse on domestic sector.
An Air India statement here today stated that the 'Spouse Plus scheme', effective from January 7- February 28 this year, would enable a full fare paying passenger in Executive Class to take his or her spouse free of cost in the same class.
Though no fare or fuel surcharge would be applicable for the spouse's travel, Passenger Service Fee and User Development Fee, as charged by the airports, would be collected.
Both the passenger and accompanying spouse are required to travel together on the entire journey, the statement added.
The offer will be available on all flights on the extensive domestic network of Air India; except Mumbai-Goa, Delhi-Coimbatore, Delhi-Thiruvananthapuram, Delhi-Kozhikode, Delhi-Kochi, Delhi-Bhubaneshwar, Delhi-Raipur, Delhi-Nagpur and Raipur-Nagpur and corresponding return flights.
01/01/09 The Week

Fare cuts to jack up airlines' losses

The 25-30 per cent cut in airfares by Indian carriers may negate the advantages of the 33 per cent cut in jet fuel costs, thus increasing their operating losses.
When aviation turbine fuel (ATF) prices were at their peak in September, Indian carriers were losing as much as Rs 10 crore a day. The cuts in ATF price had brought these down to minimal levels. But most of these gains, analysts said, will now be lost with the steep airfare cuts announced in the last few days.
A report put out by brokerage house CLSA on Jet Airways said that the fall in ATF prices had brought down the load factors (flight occupancy) required for it to break even from 78 per cent to 63 per cent. And most airlines have load factors between of around 60 per cent at present. However, the airfare cuts have raised the breakeven load factors back to 70 per cent, experts said. The initial response to the airfare cuts looks positive with travel portals reporting huge traffic, but it remains to be seen if the surge will be maintained for long.
The airlines, on their part, are banking on the lower airfares to create a surge in traffic, which will help them achieve the required load actor. This might be tough to achieve as monthly domestic air traffic is estimated to come down from 3.9 million in January 2008 to 3 million next month.
01/01/09 Anirban Chowdhury/Business Standard

Jet sweetens its fare cut

New Delhi: The fare war has begun in right earnest between domestic airlines. Air India's substantial fare cuts and reintroduction of Rs 99 basic fares by LCCs IndiGo and SpiceJet on Tuesday has now led to Jet Airways which was the first to announce some price reduction last Sunday improving its earlier offer.
The Naresh Goyal-owned carrier on Wednesday introduced a 21-day advance purchase scheme where Jet and its low cost arm JetLite's tickets will be sold for a flat basic fare of Rs 250 and Rs 9, respectively. In Jet's case, the Rs 250 will be topped by taxes and surcharge of Rs 2,325 and Rs 3,075 for short and medium domestic flights. For JetLite's, the add on will be Rs 2,175 and Rs 2,925, respectively.
"The advance purchase scheme will be on from January 1-31. Passengers can buy tickets for future travel dates during this period at the special rates," said a Jet spokesperson. This new scheme, say industry watchers, could have been forced by AI's and the LCCs' offers. JetLite had lowered basic fares on Tuesday but that did not match the Rs 99 advance price of SpiceJet and IndiGo. While announcing its cut, AI had said it will be the cheapest full service Indian carrier. Jet reacted a day later by introducing advance purchase basic fare of Rs 250, albeit for a month.
01/01/09 Times of India

Foreign airlines may own stakes in Indian carriers

New Delhi: The government is considering a proposal to allow foreign airlines such as Singapore Airlines, British Airways and Lufthansa to pick up equity stakes in domestic carriers, but with riders.
It is preparing the ground for a major policy shift on foreign ownership in aviation. Government sources say foreign airlines may be allowed to own a 20-25% stake in local carriers, but their role on boards and in the management would be limited.
The civil aviation ministry had, in the past, argued that allowing larger foreign airlines to own stakes in fledgling Indian carriers could cause harm to the domestic aviation sector.
“Things have changed. Earlier, only one Indian airline operated internationally. But now, three domestic carriers fly to foreign destinations. Our carriers have grown in size and scale in three to four years’ time. We don’t think the earlier concerns are relevant. If foreign telecom companies can buy stakes in Indian telecom companies, why can’t foreign airlines pick up stakes in domestic airlines?” a government official asked, on the condition of anonymity.
Civil aviation minister Praful Patel told ET that a proposal to allow foreign ownership of Indian operators is under discussion, as the government looks at measures to revitalise the sector.
“Allowing foreign airlines to hold stakes in domestic airlines has always been an option. There is no firm decision yet, though. Internationally, in most cases, foreign direct investment by entities other than airlines is allowed only (to the extent of) 49%. In case of foreign airlines, FDI is not allowed (to be) more than 25%,” he said.
01/01/09 Nirbhay Kumar/Economic Times

Kingfisher Airlines, Jet Airways break-even not before 2010: Experts

Mumbai: Even as Kingfisher Airlines and Jet Airways claim to having achieved a break-even in the current fiscal, audit firms, analysts and aviation industry trackers are skeptical about those claims. In a recent Annual General Meeting (AGM) of Kingfisher Airlines held in Bangalore, Vijay Mallya, Chairman, Kingfisher Airlines stated that Kingfisher Airlines is expecting to achieve operational breakeven this month. Also, Jet Airways is expecting a break-even by the end of this fiscal. According to a report in today’s Economic Times (ET), analysts think that break-even claims made by these airlines will, however, be difficult to be achieved.
Daljeet S Kohli, Research Head, Emkay Global Financial Services stated, “The crude and Aviation Turbine Fuel (ATF) prices have seen a drop though a back-of-the envelope calculation indicates that a break-even in the current fiscal will not be possible. It will take some more months for the airlines to emerge from the debts.” Some believe that the objective of making these claims on break-even is to attract funding in some form. Jet Airways reported its worst quarterly performance in over three years, incurring a net loss of Rs 384 crore in the September quarter. This was against a net profit of Rs 28 crore for the same period during the previous fiscal. The combined loss of Jet Airways and JetLite stood at nearly Rs 690 crore on March 31, 2008. Meanwhile Kingfisher Airlines reported a 90 per cent increase in its loss to Rs 483.2 crore this year. As a result both the airlines owe huge amounts- in excess of Rs 5,000 crore to the major oil companies, Airport Authority of India (AAI) and private airport operators. As National Aviation Company of India (NACIL), formed after the merger of Air India and Indian Airlines, is likely to incur a loss of Rs 2,156 crore in the current financial year. The government is examining a proposal for infusing additional equity into the company.
In all, the Indian carriers reported a cumulative loss of about Rs 4,000 crore in 2007-2008, which more than doubled to Rs 9,000 crore by the end of the current fiscal. Kingfisher Airlines and Jet Airways are also incurring losses due to declining passenger traffic.
29/12/08 TravelBizMonitor

Protest against Chennai airport expansion

Chennai: Suburban residents affected by the airport expansion have again hit the streets to protest against the move. They have appealed to authorities to shift their focus to the Greenfield airport rather than evacuating them.
The Phase I expansion, for which 131 acres of land have been acquired and handed over to Airport Authority of India, will take care of the requirements till 2016.
“Even if a parallel runway is built, the terminal capacity and passenger movement can be increased from 23 million to 30 million only. This will be saturated by 2020 because of space constraints for additional terminal buildings. Hence, constructing a parallel runway becomes obsolete. It is, therefore, advisable to concentrate on the Greenfield airport, as the budget for expansion and a new airport is high,” said a member of the public at a press meet.
The residents cited the problem of flooding if the authorities were to consider a parallel runway. “During monsoon, water flows from Porur, Mathananthapuram and Moulivakkam to low-lying areas such as Manapakkam, Kolapakkam, Girugambakkam and Tharapakkam and drains into the Adyar river.
When a parallel runway is constructed and the periphery wall is built for around 5 km, the flood water will find no way to reach the Adyar river and will flood the entire region,” said S Somasekharaan, a representative of the residents.
01/01/09 Mamta Todi/ExpressBuzz

Airport to get swankier by the day

Mumbai: With the economic slowdown hitting infrastructure and realty sector hard, all eyes are keenly hooked on to Mumbai’s Chhatrapati Shivaji International Airport’s (CSIA) ambitious makeover.
The mandate of the project had been given to the GVK group-backed consortium that included state-owned Airports Authority of India (AAI), Airports Company South Africa and Bidvest, in the year 2006.
Among other features, the year gone by has seen a new terminal readied at the airport for public use. But while 2008 has been an eventful year as far as development at the airport is concerned, a lot is still required to be done especially keeping in mind that 2011 is the target year to complete the airport project.
“Last year was noteworthy for the Mumbai International Airport Limited (MIAL), with major initiatives such as opening of the refurbished international terminal 2B. This period was also marked by major recognitions including the Aeronautical Excellence Airport of the Year Award conferred by Frost & Sullivan,” said an MIAL spokesperson.
In 2009, the developments expected at the airport include the refurbished terminal 1A for domestic passengers, a brand new terminal 1C connecting both 1A and 1B and other minor changes in terminals 2B & 2C.
01/01/09 Shashank Shekhar/Indian Express

Govt defers Air India-SATS joint venture for 6 months

Mumbai: The government on Wednesday deferred the operationalisation of Air India's joint venture with a Singapore-based company for ground and cargo handling in Mumbai and Delhi airports for six months.
"The operationalisation of Air India-SATS joint venture has been deferred for six months," a Civil Ministry official told PTI on Wednesday.
Lack of preparedness to work together is primarily the reason for deferment, the official said, adding that "security is also one of the issues behind the decision."
The government had announced that ground handling at Delhi and Mumbai would be handed over to the JV partners, Air India and Singapore Airports Terminal Services (SATS), from January 1.
Air India and SATS had in 2007 floated a joint venture to handle the ground handling and cargo facilities at the new Bangalore Airport.
However, the JV in ground handling is being opposed by the NACIL unions on the ground that such an arrangement poses security threat.
31/12/08 Press Trust Of India/Hindustan Times

India's DGCA rule may shut down maintenance training

The November 20 issue of the Daily News & Analysis of Mumbai, India, reports Aircraft Maintenance Engineering (AME) institutes might shut down across the country, a move that has nothing to do with global economics. Read On >>

Flight operations at IGI airport come to a standstill

New Delhi: Flight operations at the Indira Gandhi international airport in New Delhi came to standstill this morning as heavy fog enveloped the national capital with about 35 flights being delayed and seven cancelled.
The general visibility at the IGI airport fell below 50 metres and runway visibility range (RVR) dipped to 125 metres, below the required minimum of 150 metres for the planes to take off, sources at the airport said.
Early morning flights to Mumbai, Hyderabad, Chennai Lucknow and Pune were cancelled, they said.
About 350 flights were delayed and around 40 were cancelled due to fog on Monday and Tuesday.
01/01/09 Press Trust Of India/Hindustan Times

Air India plane forced to land 15 minutes after take-off

Kolkata: An Air India Kolkata-New Delhi flight with 72 passengers on board today landed 15 minutes after it took off from N S C Bose International airport here due to technical problem.
Air India sources said the pilot of the flight (IC263) had contacted the Air Traffic Control ten minutes after taking off from the airport at 7.30 amIt landed safely at 7.45 am and was sent for repairing, officials said.
The aircraft again started for New Delhi with all the passengers at 8.55 am
31/12/08 Indopia