Airlines on warpath, threaten to strike on Aug 18

Mumbai/New Delhi: Private airlines on Friday ganged up and decided to suspend operations on August 18 if the government does not help them cut costs, prompting an offer of talks but no assurances from civil aviation minister Praful Patel.
Painting a desperate picture of their situation, industry lobby body Federation of Indian Airlines (FIA) said unless the government helps them by lowering taxes on jet fuel and bringing down airport charges, their survival is in doubt.
But the strike threat by Jet Airways, Kingfisher Airlines, SpiceJet, IndiGo and GoAir, which between them carry about one lakh passengers daily, was interpreted as a pressure tactic by a senior official in the civil aviation ministry.
“The strategy is dual. They want to put pressure on the government. Also, they are putting pressure on their creditors such as oil companies and airport operators,” he said on the condition of anonymity.
Jet Airways, Kingfisher, SpiceJet and IndiGo are yet to pay Rs 212 crore to the Airports Authority of India for using its infrastructure. Kingfisher, Jet and SpiceJet also owe Rs 1,726 crore to oil marketing companies.
The private airlines’ high-pitched demand has been timed to coincide with discussions that may result in the government bailing out beleaguered national carrier Air India soon, said an aviation analyst who did not wish to be identified.
The government last week asked the finance and petroleum ministries to help Air India. It has appointed SBI Caps as advisor to chalk out a revival plan for the ailing national carrier, which suffered losses of Rs 7,200 crore last year.
Air India will increase the number of flights to reduce inconvenience to passengers, Mr Patel said. It is not known if Paramount Airways will join its private sector peers in the strike.
01/08/09 Economic Times

'Airlines are bluffing'

While private airlines have threatened not to fly on August 18, experts believe that it is nothing more than an attempt to get the government to the negotiating table.
That's because the cash-strapped airlines will still risk paying a huge sum towards airport parking, refunding airfare to the passengers and, above all, plan where and how to park all the 300-odd aircraft.
Aviation expert Vipul Saxena said, "The situation is very challenging for the DGCA, which has to ensure that passengers do not suffer and airlines do not violate the conditions of operating on mandatory routes, which are attached to the permission to operate on profitable routes."
He added that chances of a full-fledged strike taking place are remote. "Airlines may run services to a limited sector by not operating in loss making/less attractive sectors," he observed.
Experts also pointed out that the joint decision of the private airlines only hinted at cartelisation.
"As far as support from the ministry is concerned, it is likely to be feeble, as at the time of permitting alliance of Kingfisherâ??Jet Airways, the civil aviation minister had very categorically promised to take stringent action against any move towards cartelisation," Saxena said.
Industry analysts observed that after the Congress's encouraging performance in the general elections and in the light of forthcoming Maharashtra polls, for which the NCP is already struggling for a favourable seat sharing formula, Civil Aviation Minister Praful Patel would only be under severe pressure from his party to ensure that the situation is handled with dexterity and that no pressure is exerted on the Centre.
01/08/09 Aditya Anand/MiD DAY

Pvt airlines strike is a gimmick: Capt Gopinath

New Delhi/Mumbai: The chairman and managing director of Deccan, Captain GR Gopinath has called the strike planned by leading private airlines a “gimmick” and warned them to cut costs.
“Airlines are doing this as a gimmick or as a tactic to attract the Government’s attention but they are to be blamed for a large extent,” Gopinath told CNN-IBN about the strike planned by Federation of Indian Airlines (FIA) on August 18.
Gopinath, who sold his low-cost carrier Air Deccan to Kingfisher Airlines in 2007, asked airlines to “trim fat” and develop innovative business models.
“In a country where 98 per cent travel by train and only two per cent by air, it should be obvious to anybody that if you want to grow in the airline business you ought have to a model which is efficient and innovative.”
Gopinath chided airlines for behaving as a “cartel”, which he alleged was the beginning of their “woes”.
“They got together as a cartel and fixed price by blaming fuel surcharge. That was the beginning of airlines’ woes – occupancy fell, collections came down and losses went up.”
Gopinath accepted the complaints airline owners had made about high aviation fuel and airport cost but believed they were well aware of the risks.
“The business magnates, Vijay Mallya or Naresh Goyal, know the reality: airport infrastructure is costly, oil prices are high. But they started a business and took a risk. TV channels are losing money but more channels are coming. The message to airlines is that there is lot of cost cutting they can do themselves.”
01/08/09 CNN-IBN

Come for talks, private airlines told

New Delhi: As private airlines decided to go on strike on August 18 in protest against high rate of taxes on Aviation Turbine Fuel (ATF) and airport taxes, the government on Friday suggested to them to engage in a dialogue with it instead of putting air travellers to inconvenience.
Civil Aviation Minister Praful Patel, who is on a trip abroad, said the government understood the problems being faced by the aviation sector but reiterated that the “government does not support any move that will inconvenience the travelling public of the country.”
“We advise the airlines to engage in a dialogue with the government. The issue of tax on ATF is a State issue and the Aviation Ministry has been requesting the States for the last few years to see reason,” Mr. Patel said in a statement. “The other issues relate primarily to the economy and impact of high ATF prices in 2008-09. Air India will not participate in this decision of select private airlines and will mount additional services on August 18 so as to reduce any inconvenience to the public,” the Minister said.
Taking note of the crisis in the aviation sector, Finance Minister Pranab Mukherjee said that he would discuss the matter with Mr. Patel.
01/07/09 The Hindu

Jet fuel prices rise by 1.6 per cent

Mumbai: According to a PTI report, state-run oil firms yesterday increased jet fuel prices marginally by 1.6 per cent due to rising international oil prices. Aviation Turbine Fuel (ATF) rates in Delhi were increased by Rs 585 per kilolitre to Rs 36,923 per kilolitre. In Mumbai, the rate was increased to Rs 38,098 per kilolitre from Rs 37,475 per kilolitre. Jet fuel price in Kolkata will be increased by Rs 649 per kilolitre at Rs 45,060, while in Chennai the price has been increased to Rs 40,789 per kilolitre from Rs 40,164 per kilolitre. The increase follows a sharp 5.7 per cent cut in jet fuel prices two weeks ago.
Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) had in the past two months raised ATF rates four times on firming international oil prices.
01/08/09 TravelBizMonitor

AI not to participate in pvt airlines strike: Praful Patel

New Delhi: Civil aviation minister Praful Patel has said that Air India will not participate in the strike called by private airlines on August
18. He added that the national carrier will increase number of flights so as to people may not have to face any inconvenience.
Responding to the demand by private airlines the minister said that sales tax on aviation turbine fuel (ATF) is state subject and the ministry had been asking the states to bring down the tax on jetfuel.
31/07/09 Nirbhay Kumar/Economic times

AI may seek $700 m reparation from Boeing for delivery delay

New Delhi: With Air India considering seeking a compensation of over $700 million from Boeing for delay in delivery of 787s and also planning to cancel delivery of six Boeing 777s, the President of Boeing India, Dr Dinesh Keskar, met with the Chairman and Managing Director of Air India, Mr Arvind Jadhav, in Mumbai on Friday.
Air India had ordered 68 aircraft, including 27 B787s, 23 B777s and 18 B737s, from the US-based manufacturer at an estimated Rs 35,000 crore in 2006. The delivery of the aircraft started in December 2006 with the arrival of the first Boeing 737-800.
A senior airline official, however, said the meeting on Friday was to work out the airline’s fleet requirement keeping in mind the global crisis. Sources indicated that the airline’s viewpoint will emerge only on August 7 when the CMD is scheduled to hold a press briefing here.
Sources also indicated that Boeing will not comment on the matter till Air India has spoken on the issue.
At a recent press conference earlier this month, Dr Keskar said no discussions had yet been held with the airline for payment of compensation or cancellation of aircraft deliveries.
Analysts pointed out that generally any contract for purchase has financial liabilities on both parties. Sources indicated that the multi-million dollar compensation being sought by the airline is an “opportunity cost”.
Simply put, this is the cost of losing potential revenues the it would have earned by transporting passengers to new destinations in Australia, Europe and Africa had the aircraft been delivered on time.
31/07/09 Business Line

Can call off action: Mallya

Chairman of Kingfisher airlines, Vijay Mallya, reacting to the offer of the civil aviation minister Parful Patel for a dialogue which would address the grievances of the private airlines, said that they are open for a dialogue and without any conditions. Mallya said, "Ministry knows our problems. We are being taxed to death. Paying punitive sales tax is extremely difficult. We have been trying to engage in a dialogue with the minsitry."
Reply to a question whether the private airlines would call off the action on August 18 said, "There are still 18 days to call off action. The action on 18 should not be called a strike. We are ready to call off the action if dialogue with government works. We are not asking the government for any charity. We are ready for unconditional dialogue with the ministry."
In an unprecedented move, eight major private airlines, which carry over one lakh passengers a day, today decided not to operate domestic flights on August 18 demanding immediate bailout package from the government in the form of lower taxes and airport charges and threatened to suspend their services indefinitely if the government does not intervene urgently. Private airlines say they are under pressure due to rise in aviation turbine fuel prices.
31/07/09 Times Now

Airline stir: Govt swings into action

New Delhi: Close on the heels of private airlines issuing an ultimatum today and deciding to suspend nationwide flights on 18 August to demand urgent government intervention and an immediate bailout, the Centre swung into action, inviting them for talks while disapproving of their unprecedented protest move.
“The government understands the problems being faced by the aviation sector. However, it does not support any move that will inconvenience the travelling public in the country,” the civil aviation minister, Mr Praful Patel, said. “We advise the airlines to engage in a dialogue with the government.” Referring to the issues raised by the FIA at its Mumbai meeting today, Mr Patel said: “The issue of tax on ATF is a state issue and the aviation ministry has been requesting the states for the last few years to see reason (to rationalise them). The Union finance minister, Mr Pranab Mukherjee, said he will discuss the situation with Mr Patel.
31/07/09 The Statesman

Agents flooded with calls to re-slot flights

Mumbai: As news of the August 18 strike by private airlines spread, travel agents across the city began to get frantic calls to reschedule flights. "Unfortunately, there's no guarantee of getting a seat on the previous or the following day,'' says Ajay Prakash, general secretary of the Travel Agents' Federation of India.
Frequent flyers believe that the private airlines are threatening the government to accept their demand for a bailout. "By inconveniencing passengers, the airlines are almost forcing the government to respond. No private enterprise should be doing that,'' says Mohan Joshi, an IT professional and a frequent flyer.
While flyers fear that the airlines might have their way, Air Passengers Association of India (APAI) feels that the government should come down heavily on them.
01/08/09 Chinmayi Shalya/Times of India

Political parties voice concern over airlines strike

New Delhi: The BJP today blamed the policies of the government for the airline strike on Aug 18 while Congress advised private airlines to think out of the box to solve their economic problem sans retrenching staff.
"Undoubtedly, Air India is in a neck-deep financial crisis but the situation of private airlines is no better. The failure of the government to provide incentives for the aviation industry is monumental,"BJP spokesperson Rajiv Pratap Rudy said.
" They should think out of the box and find solution without retrenchment," Congress spokesman Manish Tewari said when asked for a reaction on the issue.
He said,"they (airlines) should find a solution. After all, other airlines in the world are also running their operations."
The CPI(M) too has criticised the move by private airlines to suspend flights saying revival of the industry was not possible as long as people&aposs purchasing power grows.
Senior party leader Sitaram Yechury said"whatever sops are given, revival of the airline industry is possible only when air traffic picks up.
31/07/09 PTI/Indopia

Govt rules out airline bailout

New Delhi: The Congress-led government is unwilling to provide any more bailout packages to private airlines because they can easily raise cheap loans to tackle their cash-flow problem.
“Air India is a special case. The government owns it and is already committed to infusing equity in that airline. We cannot give any more to private airlines,” said top civil aviation officials.
Earlier, the government had allowed airlines, including Kingfisher and Jet Airways, the flexibility to pay their jet fuel dues of over Rs 2,900 crore in six interest-free instalments. This is seen by many as a form of bailout. The government had also stopped giving fresh licences a year back to limit the number of players and reduce competitive pressures on the existing operators.
Civil aviation minister Praful Patel, who is travelling abroad, had earlier said that there “could be no (more) bailout for private airlines. The promoters are big people they should find money for their airlines.”
Justifying a revival package for Air India, the officials said the national carrier operated on many uneconomic routes such as those in the Northeast and Kashmir. Besides, it had to often fly abroad on national duty.
“We cannot compare a bailout for Air India which has served national interests at the cost of its own economics with a package for private airlines who threaten to stop flying if they do not get help,” they said.
Finance ministry officials, however, said they had long proposed declared-goods status for jet fuel, which could help to reduce the value-added tax on it from as high as 29 per cent in some states to just 4 per cent across the country. Andhra Pradesh has the lowest tax at 4 per cent, while Tamil Nadu and Bihar have the highest at 29 per cent. Bengal charges 25 per cent.
31/07/09 The Telegraph

A-I may drop plan for six B-777s

Faced with a slump in the aviation sector and mounting government pressure to restructure, cash-strapped national carrier Air India is mulling cancelling delivery of six Boeing-777 long-haul aircraft.
Air India Chairman and Managing Director Arvind Jadhav and Boeing India President Dinesh Keskar held a meeting in Mumbai today at the Air India office to discuss the matter.
“Air India is in dialogue with Boeing for cancellation of six B-777 aircraft deliveries in 2010-11 and 2011-12 in view of the current global aviation scenario,” an Air India spokesperson told PTI.
The national carrier, which is facing a severe cash crunch, had ordered 111 aircraft, including 68 from Boeing, at a total cost of over Rs 50,000 crore to augment its fleet. The fleet renewal plan, including scheduled deliveries of airplanes, is currently being reviewed by the carrier. As of now, it has 46 aircraft on lease, including 17 on sale-and-lease back arrangement.
The Air India board, in its recent meeting, asked the airline management to cancel the delivery of six aircraft. But the letters have not been issued, an airline official said.
01/08/09 Press Trust Of India/Business Standard

Airport authorities halt construction in Sec-8, Dwarka

The Airport Authority of India (AAI) has put on hold all ongoing construction work at Dwarka Sector-8, claiming the houses fall in the air route and can lead to a major accident. The AAI has now directed the Delhi Development Authority (DDA) to restrict the height of the buildings and ensure that any plans for construction in the area have clearance from them before work can begin. This is the first time the AAI has objected to construction work in the area. Nearly 100 plots in Dwarka Sector-8 have been affected by this order. The AAI has said that these buildings fall in the path of the aircraft when it is landing on runways 27/9 and 28/10.
The DDA has now shot off letters to the plot owners informing them about the necessity of obtaining a no-objection certificate from the airport authorities apart from an approval for their building plan from the land agency.
Officials of the Delhi International Airport Limited (DIAL) authorities referred to a special gazette notification issued by Government of India on June 30, 2008. “No building or structure higher than the height specified in Annexe II (15 metre) to this notification shall be constructed or erected on any land within a radius of twenty kilometres from the aerodrome reference point,” the notification states.
DIAL claims the buildings in the area fall in the flight path. It is, however, silent on buildings have already come up and taller than the specified height.
01/08/09 Deepu Sebastian Edmond/Indian Express

Boeing rolls out P-8A Poseidon; India is first buyer

Washington: American aviation giant Boeing today rolled out its first 'P-8A Poseidon', claiming it to be the world's most advanced multi-mission maritime patrol and reconnaissance aircraft, with the Company saying that India would be its first buyer country.
India has ordered eight P-8Is, a derivative of the American version, the first of which Boeing will deliver within 48 months of the contract being signed. The rest seven aircraft would be delivered by 2015, filling a wide gap in India's maritime reconnaissance capability, hit by crashes of its Russian built aircraft.
31/07/09 Lalit K Jha/Press Trust of India

Swine flu: Foolproof screening at airports not feasible

Pune: Mandatory screening of air passengers, disembarking at international airports, can only give a hundred per cent desired result of no travellers with flu like symptoms leaving the zone, said Dr Maya Tulpule, Secretary, Indian Medical Association.
“If one wants to have a 100 per cent result that no air passengers arriving at the terminals with flu like symptoms leave the premises, then the medical teams will have to screen and quarantine everybody, which is a cumbersome task,” reasoned Dr Tulpule, when asked if voluntary screening at international airports is a foolproof method to detect travellers with flu like symptoms.
Explaining further, the physician said a foolproof screening means quarantining every patient for eight days by keeping them under observation, which is not a logical solution to curb the spread of the virus.
Instead of that proper campaign and advisories issued to air travellers would be time saving and more resourceful as affected persons or individuals having the symptoms self report the case on arrival.
Apart from that Dr Tulpule said that individuals in window period or others who have self medicated during the flight for mild fever and carrying the symptoms will escape detection even if screened as the results would show normal. She also said that quarantining means to keep children under observation for 10 days and adults for eight days.
01/08/09 Sakaal Times

New timings of Surat-Delhi Indian flight from Aug 5

Surat: Two years after the resumption of airline services, air travel in the city is still getting step-motherly treatment from airlines, which
do not find the city's route an important enough route to concentrate on.
The schedule of a solitary round-trip flight between Delhi and Surat ( morning to afternoon) run by Indian, which has been regularly irregular, is about to change again by August 5. The flight will now leave from Delhi by 2.30 pm and reach Surat by 4 pm. It will take off half an hour later and land in Delhi at 6.10 pm. In fact, the airline has also changed the flight timings of August 3 and 4.
Though the airline claims the change is to deal with weather problems in winter, observers feel differently.
"We have done this for operational purpose," said an official from Indian. "With this changed schedule, there will be no more problems with weather in coming winter months. Daily operations will be guaranteed."
However, a source from Surat airport said, these changes in schedule was because the Surat route is not a priority route for the national carrier. To accommodate more important routes, Surat flight times have been changed to less important times, the inconvenience of the customer notwithstanding.
01/08/09 Times of India