Tuesday, January 20, 2009

SpiceJet launches �Book for Two, Pay for One� offer under �SpiceJet Happy Hours� promotional offer

SpiceJet yesterday launched an innovative promotional offer- �SpiceJet Happy Hours�. To kick start the �SpiceJet Happy Hours�, there is a Two for One offer available on SpiceJet.com. The booking to avail the offer started yesterday and is open till today. Under this offer, if a ticket is booked for two or more people in a single transaction, every second passenger gets to fly free. Passenger on free ticket will have to pay Passenger Service Fee (PSF) ranging between Rs 200 and Rs 233. There will be an additional charge of Rs 350 on flights from Hyderabad.

Bookings made under this offer cannot be rescheduled or cancelled. The offer cannot be clubbed with any other offer or discount from SpiceJet. The offer is not open for infant bookings and is available for a limited period. Announcing this, Sanjay Aggarwal, Chief Executive Officer, SpiceJet Limited said, "We are delighted to launch the SpiceJet Happy Hours promotion which is available only on our website. This will bring exciting options for all who book online. The Book for Two and Pay for One offer is an innovative promotion that will stimulate the market. The individual travellers now have an opportunity, to take their companions when they are travelling. Families who want to get away for a long weekend will now be able to do so easily, availing this offer.�

GoAir joins fare war with IndiGo, SpiceJet

Mumbai: The Wadia Group�s GoAirlines (India) Pvt. Ltd, which runs low-fare carrier GoAir, has joined a fare war among peers in the airline industry by offering uniform fares, inclusive of surcharges and other taxes, for purchases made 21 days in advance.

For short sectors, defined as less than 750km travel distance, GoAir will charge Rs1,700 a ticket and Rs2,700 for longer distances, a GoAir statement said. In effect, a Mumbai-Delhi ticket on GoAir bought 21 days in advance can be bought for Rs2,700 instead of the base fare of at least Rs1,000 plus Rs2,925 of surcharges and airport fees.

GoAir�s new offer is in reaction to the re-introduction of a Re1 fare by the Delhi-based rival IndiGo, run by InterGlobe Aviation Pvt. Ltd, on certain routes and SpiceJet Ltd�s Rs99 base fare for tickets booked at least 21 days before travel.

Three major airline groups of the country have also resorted to price cuts to stimulate the passengers. The quarter ended 31 December witnessed an 18% decline in domestic passenger growth.

Others such as Jet Airways (India) Ltd, the country�s largest private carrier by passengers carried, and its unit JetLite (India) Ltd have also introduced 21-day advance fares. Jet has offered Rs250 base ticket fares while JetLite started at Rs9 base fare for travel in January. It has similar schemes for its business class too.

Rival carrier Kingfisher Airlines Ltd has slashed fares between 21% and 65% on various routes from 1 January.

State-run National Aviation Co. of India Ltd, which runs Air India, has announced an average reduction of 52% in basic fares for domestic travel on 20 major routes.

Airlines such as Jet Airways expects a 15% increase in passenger traffic, but CLSA Group analyst Anirudha Dutta is sceptical. �With yields coming under pressure again and load factors unlikely to increase to break-even levels in a difficult macroeconomic environment..., we do not believe low fares will stimulate passenger growth as in 2003-07,� Dutta wrote in a Monday report.

Two more airlines home in on Dhaka skies

Two more foreign carriers are expected to appear across Dhaka skies in three months, intensifying competition on busy routes, industry insiders said yesterday.

Reactions to the entry of two foreign carriers -- Indian Kingfisher Airlines and the Malaysian budget carrier AirAsia Berhad -- have been mixed. One local airline said it feels the pinch of a decline in traffic to Kolkata and Kuala Lumpur destinations.

Other local private airlines seem unruffled.

Of the two entrants, Kingfisher Airline of Indian liquor baron Vijay Mallya seeks to operate on the Dhaka-Kolkata route beginning in mid-February. Kingfisher will be the sixth airline on the route, blessed mainly by Bangladeshi medical treatment seekers, tourists and business people.

One of the biggest low-cost carriers in Asia, AirAsia or AirAsia X, won government approval and aimed to start Dhaka-Kuala Lumpur flights in early March.

The carrier said it would operate seven flights a week on the route, where Bangladeshi workers destined to Malaysia are the main travellers.

But aviation analysts said the share of the aviation pie becomes smaller for the airlines due to slowing recruitment of workers in Malaysia, and an increase in alternative travel means between Dhaka and Kolkata, such as bus and railway.

�We want to begin the Dhaka-Kolkata services by February 16. Initially, we want to operate daily. But we have to operate two flights a day,� said a senior official of Air Galaxy Ltd, general sales agent for Kingfisher in Dhaka, yesterday.

Kingfisher, one of the fastest growing carriers in India, seeks to attract travellers from Biman Bangladesh Airlines, GMG Airlines, United Airways, India\'s Air India Express and Jet Airways.

The entry of Kingfisher will enhance the overall capacity of the route, resulting in over 200 air-travellers a day. Aviation industry analyst Kazi Wahidul Alam believed that the volume of passengers on the route has not increased, but the increase in alternative travel modes likes the bus and the rail has dispersed passengers.

�The market appears saturated. The available seat capacity of the carriers will be more than the market demand, after entry of another carrier,� he said, cautioning local airlines that overall traffic might be hurt.

The Air Galaxy official however believed that Kingfisher would have an edge over others thanks to its "reliable services".

Budget carrier AirAsia X initially wants to operate five flights a week, after its Bangladesh debut in early March, said Enam Ahmed Chowdhury, managing director of AirAsia\'s local partner Dahmashi Tours and Travels Ltd.

With the entry of AirAsia X, the total number of airlines on the Dhaka-Kuala Lumpur route will be five. Other operators include Biman Bangladesh Airlines, GMG Airlines, Best Air and Malaysia Airlines. All of them depend mainly on Bangladeshi people working in Malaysia.

But the trend in hiring chunks of workers from Bangladesh is nearing an end. Starting in August 2006, Kuala Lumpur recruited over four lakh Bangladeshi workers.

Officials said the number of workers going to Malaysia is gradually declining and signs of a boost in manpower exports to Malaysia appear dim.

Enam however expected that the carrier would be able to attract traffic because of the relatively low fare. �Still there is some recruitment in the pipeline. We will also work for attracting tourists,� he said.

But an official of Biman Bangladesh Airlines said the carrier counts a drop in outbound traffic to Malaysia.

Aviation industry analyst Kazi Wahidul Alam also pointed to slowing recruitment in Malaysia. �Overall, competition in the market will be intense."

Kingfisher Airlines launches daily direct flights from Bangalore and Chennai to Colombo

Kingfisher Airlines yesterday extended its international footprint by launching daily direct flights on Chennai-Colombo and Bangalore-Colombo routes. Both the routes will be connected with A320-200 aircraft with a seating capacity of 134 passengers (20 Business-Class and 114 Economy-Class). The airline is expecting to receive 70 per cent occupancy on an average Chennai-Colombo route, while working towards enhancing load factor rate on Bangalore-Colombo route. The flights will depart from Bangalore at 3.00 pm in the afternoon and reach Colombo at 4.20 pm, and the return flight will take off from Colombo at 9.15 am and reach Bangalore at 10.30 am. Also from Chennai, the flights will depart at 6:45 am and reach Colombo at 8:05 am, while the return flight will take off at 5:30 pm and reach Chennai at 6:45 pm.

Kingfisher Airlines has appointed Colombo based Royal Spence Aviation Pvt. Ltd. as the sole GSA (General Sales Agent) for Sri Lanka. This was announced at a press conference held yesterday in Colombo during the launch of the daily services to Colombo.� Shiva Ramachandran, Vice President � Global Sales, Kingfisher Airlines Limited; Sasha Sebastian, Country Manager � Sri Lanka, Kingfisher Airlines Limited; D H S Jayawardena, Chairman, Royal Spence Aviation Pvt. Ltd.; J M S Brito, Deputy Chairman, Royal Spence Aviation Pvt. Ltd. were present at the conference. Speaking at the press conference, Ramchandran said, �Colombo is our second international destination after London. We have selected Colombo because it is a short haul destination and the demand is increasing every year. We are looking at connecting more Indian destinations with Sri Lanka in the near future to enhance the connectivity between both countries.�

According to Ramachandran, the demand on Chennai � Colombo route has recorded an immense growth since two years. The route is showing positive growth despite the economic slowdown. He said, �Chennai � Colombo is already a mature market and we are improving the connectivity and looking at enhancing the passenger experience. Bangalore � Colombo route is still not up to the mark, but we are working in that direction to improve it in the coming years.�

Saturday, January 17, 2009

Grant aviation infrastructure status: Vijay Mallya

New Delhi: In a bid to ease credit pressure, Kingfisher Airlines chairman Vijay Mallya has made a pitch for the government according infrastructure status to the aviation sector. Speaking at a seminar organised by the Aeronautical Society of India here Mallya said the change in status would go a long way in enhancing credit rating and banking arrangements.

"The civil aviation ministry should persuade the finance ministry to grant the aviation industry the infrastructure status, instead of the service sector status which we have now," Mallya said.

Pointing out that the sector transported thousands of tonnes of equipment and passengers across the country on a daily basis, he argued that grant of infrastructure status would help ease dealings with the RBI as well as commercial banks, both in the private and public sectors.

"It will make an enormous difference in our credit rating and financial arrangements," Mallya said.

Queried about the operational tie-up entered into with Jet Airways, Mallya confirmed thathe synergies involved in curtailing costs were "working very well. ... We are coordinating in many ways. Obviously it is a process that takes time to unfold."

Other dignitaries present on the occasion were Delhi chief minister Sheila Dikshit, civil aviation secretary M Madhavan Nambiar, former Air India CMD V Thulasidass, director general of civil aviation Nasim Zaidi and his predecessors K Gohain and Satinder Singh.

Kingfisher postpones Hong Kong, Singapore flights

Kingfisher Airlines has said it has postponed its planned flights to Hong Kong and Singapore due to some technical reasons, reports Financial Express.

Previously the airline had announced its plan to launch the two flights from Jan.12, 2009 and 18, respectively.

The company said that the Airbus A-330, delivered to Kingfisher, which were supposed to be deployed on the Hong Kong and Singapore routes, have some performance issues with the in-flight entertainment system.

Shares of Kingfisher Airlines closed up�Rs 0.25, or 0.73%, at Rs 34.50. The total volume of shares traded at the BSE was 261,887. (Friday).

SpiceJet CFO quits the company

The Chief Financial Officer of low-cost airline Spicejet, Parthasarthi Basu, today said he has resigned from the company.

"I have resigned from the airline due to personal reasons," Basu told PTI, and added he would join consumer durables firm Whirlpool India Ltd as Vice President � Finance and Asia Cost Productivity.

Beginning with the resignation of the then CEO Siddhanta Sharma in July, a number of senior executives have quit the company last year.

Wednesday, January 14, 2009

Air traffic dips 5% in 2008 on ATF price rise

NEW DELHI : Spike in fuel prices cast its shadow on the country�s aviation sector in 2008 which witnessed a decline of nearly 5% in passenger
traffic, according to government data.

This is the first time in several years that passenger traffic witnessed a dip. The last decline was witnessed in 2001-02 following the 9/11 terrorist attack in the US. Domestic airlines such as Air India, Kingfisher Airlines and IndiGo flew 40.77 million passengers in 2008 compared to 42.85 million passengers in 2007. Low-cost airlines IndiGo and SpiceJet among others, however, bucked the recessionary trend during the year. IndiGo registered a 46.53% jump in its customer base during this period.

Double-digit growth in the aviation sector began to fumble since April, as airfare climbed north following a spike in prices of aviation turbine fuel (ATF). In the following months, fare on most of the sectors witnessed a jump of 60% jump and in some cases even 100%.

With consolidation in the domestic skies, cheaper fare options offered by budget airlines such as SpiceJet, IndiGo and Deccan almost vanished. Mounting losses mainly on account of high fuel price and excess capacity also forced airlines to keep their tariffs high. Besides, air-carriers also cut capacity to rationalise their operations.

�Nearly 23 aircraft operated by scheduled carriers got de-registered from India in 2008. Non-scheduled carriers also sent back their aircraft to the lessors during this period. The country�s largest private carrier Jet Airways wet-leased four of its aircraft last year,� an official in the directorate general of civil aviation (DGCA), who did not wish to be named, said.

However, lately domestic carriers have begun to witness improvement in their financial health with fuel prices plummeting by nearly 54% since September last year. After showing resistance to bring down fare, airlines have begun to pass on the benefits of lower fuel prices to customers. National carrier Air India slashed its basic fare in the range of 35-82% across various domestic sectors. Other airlines such as Kingfisher, SpiceJet and IndiGo also followed suit later.

But, these fare cuts have not brought back passengers to these airlines with the slowdown looming large on the economy. In fact, domestic air traffic declined sharply by 17% in December, 2008 to 3.23 million.

�Even the massive cut in airfare is not creating enough demand. This is despite budget airlines offering an average fare of Rs 3,000 on most of the sectors. Network carriers are charging a little over Rs 4,000 for the same sector. Business sentiment is down due to a downturn in the economy. The Mumbai terror attack has also affected the traffic to some extent,� a top airline official, who did not wish to be quoted, said.

Domestic air traffic down 5% in 2008

The Kingfisher-Kingfisher Red grouping ousted Jet-Jetlite from the top spot in the Indian aviation market in December, according to data released by the ministry of civil aviation today. Confirming the airline industry\'s estimates, domestic passenger traffic for the calendar year 2008 showed a decline of five per cent compared to the previous year.

Total air traffic carried in 2008 stood at 40.8 million, compared with 42.9 million in the previous year. The slowdown occurred in the second half of 2008, when air traffic fell by 16.20 per cent compared to the same period a year ago, while it increased by around eight per cent in the initial six months.

The steepest fall came in the fourth quarter (October-December), when air traffic fell by 17.39 per cent. The price of aviation turbine fuel (ATF) rose by around 56 per cent between January and August, with a consequent rise in air fares. But though the prices fell by around 54 per cent from August to January, this was not matched with a similar cut in fares.

Domestic air traffic for December 2008 fell by 17.17 per cent compared to the same period last year. While average yearly market share figures for most of the carriers remained constant in 2008 compared to 2007, Kingfisher Red (previously Air Deccan) saw its share dip from 17.1 per cent to 12.2 per cent in 2008.

Delhi-based low-cost carrier IndiGo garnered 11.6 per cent of the market, compared with 7.6 per cent the previous year. Full service carrier Jet Airways\' share of the market shrank from 19 per cent to 16.7 per cent, while national carrier Air India\'s share decreased from 18 per cent to 16.8 per cent. Full service carriers lost some market share to low-cost carriers, mainly because the latter introduced fresh capacity.

Excepting Paramount, which has a very slight presence in the market, IndiGo had the highest loads of 75.5 per cent. The industry average loads for the month stood at around 69 per cent.

Tuesday, January 13, 2009

Jet Airways group remains India\'s largest airline

New Delhi (IANS): Private carrier Jet Airways, together with its low-cost airline JetLite, was India\'s largest domestic air services operator in 2008, ferrying some 12.01 million passengers for a market share of 29.5 percent, latest data showed on Tuesday.

Vijay Mallya\'s Kingfisher Airlines, along with its budget carrier Kingfisher Red, was next, flying 11.26 million passengers to capture a 27.6 percent market share, as per data released by the civil aviation ministry.

The state-run Air India\'s domestic operations, which earlier operated under the Indian Airlines brand name, continued to lose market share and flew just 6.63 million passengers for a market share of 16.3 percent. It had a 19-percent market share in 2007.

�We have been the market leader since 2000 and we continue to maintain that lead. The acquisition of Air Sahara, which now flies under the JetLite brand name, our market share has only improved,� said a spokesperson for Jet.

Air India, which was formed after the merger of another state-run carrier Indian Airlines - that now ceases as a brand name - said they hope to regain a lot of their market share in the current year.

�Last year, we were third. Now we rank second after Jet Airways and ahead of Kingfisher, that is, if you consider the airlines individually,� said an Air India spokesperson.

�As new aircraft join our fleet at regular intervals, you will see our market share improve further.�

Interestingly, despite the proliferation of low-cost carriers like SpiceJet, GoAir and IndiGo, the scheduled carriers continued to dominate the market with a 54.7 percent share.

Overall, Indian domestic carriers ferried 40.7 million passengers in 2008, a marginal drop of 5 percent over the previous year. Indian carriers carried 42.8 million passengers in 2007.

Monday, January 12, 2009

Low-cost airlines may get more peak-time slots in metros

Low-cost carriers may soon pull a large number of corporate customers away from the full-service carriers. The civil aviation ministry and the Directorate General of Civil Aviation (DGCA) are planning to award the low-cost carriers some key morning and evening peak-time slots (a fixed time for departure or arrival of a particular flight) lying unused with the full-service carriers at metro airports like Delhi and Mumbai.

DGCA officials and airline officials confirm that airlines like Jet Airways and Kingfisher are not using around 10 per cent of their slots during the peak periods.

Slots are given to airlines for all airports collectively and on a six-month basis (summer and winter schedules). Each airline puts in its request for slots, which are then decided by the DGCA, civil aviation ministry and the airport operator. The award of slots usually follows a historical trend wherein an airline retains the slots it had operated in the previous schedule.

Both Delhi and Mumbai handle 550 flight movements each daily, with around 140-160 prime-time departure slots and an equal number of arrival slots.

A low-cost airline executive also said that airport executives of both Mumbai and Delhi airports had unofficially informed them that there were slots in both airports that were lying unused. Ajay Singh, director in SpiceJet, a low-cost carrier, said: “We have decided not to downsize and are adding flights. There are unused slots available in prime time, when corporate travellers go, which we have asked the government to give.”

“This has become a practice of late when the airlines combine a lot of flights during the day. If an airline has around five flights in two hours, it usually combines the flights and cut them to three. Since this is a regular practice, we might give some of the slots to other deserving airlines like IndiGo and SpiceJet who have asked for them,” said a civil aviation ministry official.

Industry experts say around 80 per cent of the domestic corporate travellers in the country are mostly carried by full-service airlines like Jet Airways and Kingfisher or their low-cost affiliates.

For instance, in the Bangalore-Chennai sector, the KFA-KF Red combine operates six out of the nine flights in the key prime-time slots of 6 am-9 am and 6 pm-9 pm. Similarly, the combine operates around 7 out of around 13 flights in the key morning and evening slots in the Bangalore-Hyderabad sector.

Similarly, in the Mumbai-Delhi sector, which is the single largest revenue generating sector in the country, the Jet-JetLite combine controls almost 35-40 per cent of the prime-time slots.

“This move will add a significant amounts to the corporate traveller base of the low-cost carriers. And this in turn will enable them to raise their ticket prices and not pull them back for the leisure traveller,” said Keyur Joshi, COO of travel portal Makemytrip.

While corporate travellers account for around 30 to 40 per cent of a low-cost carrier’s total customer base, they account for around 60 per cent of the total customer base of a full-service carrier. The revenue chunk from corporate travellers would be more than 75 per cent for full-service carriers since that includes business and first-class fares as well as corporate travel contracts with companies.

The award of unused or under-used slots will be a boon for the low-cost carriers especially in an airport like Mumbai which has paucity of slots.

“While getting additional slots is easier at the Delhi airport now with the opening of the third runway, it is impossible at the Mumbai airport. If we get some existing unused slots at the Mumbai airport, it would mean much higher loads for us,” said a low-cost carrier executive.

The Mumbai airport did not allot any additional slot last year. Sources said that with the land constraint which the airport is facing, no airline should expect additional slots for the coming summer schedule either. Jet Airways already has more than 80 daily departures out of Mumbai while Kingfisher has more than 60.

Giving away unused slots to more deserving carriers would also be good news for airport developers at a time when their passenger and airport charges have taken a hit due to declining air passenger traffic.

“Unused flight slots lead to lower revenue for us. We would want flight slots to be operated by an airline that can make more efficient use of them through better capacity management. We would also prefer more slots operated by regular narrow-bodied aircraft like the A320 rather than turboprops,” said a spokesperson of Mumbai International Airport Ltd (MIAL), the GVK-led consortium that currently operates the Mumbai airport.

Friday, January 9, 2009

IndiGo bucks trend, plans to hire 50 pilots

MUMBAI: IndiGo, the countrys largest budget carrier, has decided to hire nearly 50 pilots for its Kolkata, Bangalore, Hyderabad, Pune and Jaipur operations.When contacted, IndiGo president Aditya Ghosh confirmed the development to ET. We are looking to hire 30-50 captains. These are near-term requirements and we will complete the process in the coming weeks, Mr Ghosh said.

Delhi-based IndiGo will pay around Rs 5 lakh per month to the pilots, including accommodation allowance, depending on the experience and positions of them.The country's third largest carrier employs 228 pilots for its fleet of 19. Of this, 104 pilots are also CAT III qualified and trained.

The Indigo Airlines needs more pilots as it plans to increase the number of flights over the next fiscal and raise frequency at Delhi, Kolkata, Mumbai, Hyderabad, Chennai sectors. The airline plans to add 30 destinations in the country by 2010. It has more than 100 flights, connecting 20 destinations and controls 14.7% market share.

The fresh recruitment of pilots by IndiGo comes at a time when Kingfisher Airlines and Jet Airways had asked their pilots, among others, to leave. Jet had offered a voluntary retirement scheme (VRS) to more than 300 staff.

Oil strike begins to pinch new

The oil officers strike entered the third day today as talks between the
government and striking officers association failed to arrive at a settlement,
amidst visible signs of fuel shortages, the liklihood of officers from other
public sector units joining the oil officers strike and reports of the
government having ordered oil companies to sack the striking officers.

So far 64 officers, belonging to the Oil Sector Officers Association, which is
spearheading the strike, had been terminated yesterday even as the strike is
expected to escalate to other public sector units in the in power, steel and
engineering sectors. Reports also say senior oil company executives being
sympathetic to the striking officers.

With only Hindustan Petroleum Corporation supplying fuel, and exisitng stocks
being rapidly depleted, the situation has turned grim with prospects of
scarcities looming large. According to reports snaking queues are seen outside
HPCL petrol pumps.

A large number of petrol pumps and CNG outlets operated by Indian Oil and Bharat
Petroleum have run out of stock and consumers are beginning to feel the impact
of the strike as cabs and autos go off the roads as tanks run dry.
Domestic Airlines

Shortage of petrol, diesel and cooking gas has been reported from various parts
of the country as the indefinite strike of state-owned oil companies\' officers
enterd its third day. A number of pumps had reduced their stocks in anticipation
of a further cut in fuel prices.

After a marathon two-hour negotiation, petroleum minister Murli Deora and the
striking officers had failed to arive at a settlement as both refused to budge
from their demands.

The impact of the strike is expected to magnify as the government has so far
refused to relent to the striking officers demand for better pay packages, on
the grounds that the recently revised salaries are among best at a time when the
economic slowdown is leading to job losses.

Deora is likely to meet Prime Minister Dr Manmohan Singh later in the afternoon
on the strike after the union cabinet morning.

Flights have been delayed and cancelled at all major cities, with the worst
affected being Indian Airlines,
Jet Airways and
Jetlite as they source their
aviation turbine fuel from Indian Oil Corporation, whose officers have
alsojoined the strike. However,
had had a relatively smoother time as it tanks up from Hindustan
Petroluem, whose officershave not joined the strike.

The country\'s main gas trunk pipeline Hazira-Vijaypur-Jagdishpur (HVJ), run by
GAIL, continued to remain out of operations as ONGC has failed to supply natural

The impact is now also being felt on the power sector, with the gas-based power
units across the country facing shutdowns on Thursday. According to the
\'northern region load despatch centre\' data, around 1,500 MW of gas generation
was \'\'affected due to non-availability of fuel.\'\'

The shortages have affected power generation at power plants operating on
natural gas as feedstock, across states.

Over 9,000 officers of National Thermal power Corporation are expected to join
the approximately 40,000 oil sector officers, raising the spectre of power cuts.

The BHEL Executives\' Associations, which supports the OSOA\'s srike plans to join
the strike if the government does not implement the Justice M J Rao Committee\'s
recommendations for central public sector enterprises.

Oil officers being sacked

The government has asked PSU chiefs to sack the striking officers. It is
reported that upto 64 officers from ONGC may be sacked. ONGC\'s Association for
Scientific Technical Officers (ASTO) secretary Manoj Bhagawati said that
including him three other officers from Assam Assets were placed under
suspension for participating in the nationwide strike since Wednesday.

Another three suspended officers include A K Barua, Diyajuddin Ahmed and
Safaruddin Ahmed.

Impact of the common man

* Fuel scarcity for private car owners

* Taxis and autorickshaws have been going off the road as their tanks run dry

* Commodities will get dearer if they cannot reach market, particulalry
perishables like vegetables and fruits

* Cuts in power supply

* Flights affected

* LPG and pipeline gas supplies fall

Foreign carriers may soon buy stake in Indian airlines

New Delhi, Jan 7 (IANS) Foreign airlines may soon be allowed to buy equity
stake in domestic carriers, a senior government official said here Wednesday.�We
are in talks with the industry stakeholders. We have to first evaluate how much
additional investment we need in the form of FDI in the aviation sector,�
Aviation Secretary M. Madhavan Nambiar said at the Indo-US Chambers of Commerce

Though foreign investment is allowed up to 49 percent in Indian air
operators, foreign carriers are still barred from owning stake in domestic

Many foreign carriers, however, have shown interest in owning stake in
Indian airlines.

Nambiar added that the government would sign a bilateral safety agreement
with the US next year, which would help the two countries share their

The Bilateral Aviation Safety Agreement (BASA) is expected to help Indian
companies market their products more effectively in global level, an aviation
ministry official said.

DoNER ties up with Indian for dedicated air services in North East

After nearly two years of tender submissions and bidding, the Ministry for
Development of North Eastern Region (DoNER) has tied up with Indian erstwhile
Indian Airlines to have
dedicated air services across the region, a Central Minister said yesterday at
the 57th plenary meeting of the Northeast Council. �The Ministry has had talks
with Indian to have dedicated air services across the North East, which will
greatly boost accessibility in the region,� said DoNER Minister, Mani Shankar

Speaking on the issue of increasing interest in investment in the region, Aiyar
said that after Thailand they will now concentrate on Vietnam. �Last time we had
a summit in Thailand to showcase the potential of the North East and encourage
investment in it, which got a great response. This time we will hold a similar
summit in Vietnam,� he added.

Advance bookings surge 30% on air fare cuts

Major Indian carriers have seen advance bookings on travel portals surge by 30 per cent since the fare cut announcements last week.

While portals such as makemytrip, cleartrip and ezeego have seen a rise of 30 per cent in advance booking in the first week of January, others such as yatra and travelocity, with a 10-15 per cent surge, are also expecting more bookings in the coming weeks.

�Domestic and international bookings have surged since Kingfisher, Air India and Jet Airways cut fares, and the low-cost carriers announced Rs 99 and Re 1 tickets for advance travel,� said Himanshu Singh, managing director, Travelocity.

The cleverly-introduced advanced booking fares have induced passengers to book tickets until as late as November.

For instance, Delhi-based makemytrip sold around 51,000 domestic airline tickets from January 1 to 5. Of that, around 82 per cent were booked for January, while the rest came for the five months from February till June. The portal has seen around 10 JetLite tickets getting booked for as late as November. Last year, 95 per cent of the bookings came for January and only 5 per cent were for the rest of the months. Also, there was no booking beyond March 2008.

Similarly, Mumbai-based travel portal cleartrip, which sold 70,000 tickets between December 26 and January 5, saw 70 per cent of the tickets being booked for the current month, and around 3-10 per cent for the months till April. cleartrip booked 5 Jet Airways and Kingfisher tickets each for November.

�Given that this is only the first week of January, we expected most of the bookings to be for this month. But, we have never seen bookings this early before. We usually see advance bookings for only as late as 30 days from the announcement of the fares,� said Noel Swain, vice-president, marketing, cleartrip.

Portals now expect advance bookings to account for a larger chunk of their revenues.

��Prior to the announcements last week, only 10 per cent of our total bookings were advance. Now, this has shot up to 30 per cent,� says Keyur Joshi, COO and co-founder, makemytrip. Portals also said that unlike before, airlines are offering an increased chunk of their inventory on such fares.

As a result of the bookings, airlines have made around Rs 3-5 crore of upfront cash on each of these travel portals in the first week of the month itself.

While SpiceJet has already sold around 20,000 tickets on two portals together, giving it upfront cash of more than Rs 8 crore last week, IndiGo Airlines has sold more inventory but has earned revenues worth Rs 6 crore since their average prices offered are lower than SpiceJet.

Full service carrier Kingfisher, along with Kingfisher Red, has also sold tickets worth Rs 8-10 crore on just cleartrip and makemytrip. The actual revenues earned would be much more substantial since the portals account for a mere 3-5 per cent of a full service carrier�s total sales and 5-8 per cent of the sales of a low-cost carrier.

Travel agents also said their overall bookings have gone up by 20 per cent. �Earlier, given the competition and abundant capacity, airlines felt their pricing should be more dynamic, so spot fares emerged. But now that capacity has reduced considerably, and competition is not so tight, airlines are back to offering advance purchase fares,� says Anoop Kanuga, chairman-western region, Travel Agents Association of India.

Industry experts said there would be some shift in travel trends as the railways would lose some First AC passengers to the low cost carriers, which in turn would lose some of their customers to the full service carriers, as the gaps in fares among the three have narrowed.

According to a recent study done by Yatra, a Rajdhani Express first AC fare on Delhi-Mumbai would come to Rs 3,300. JetLite is giving away an all-inclusive fare of Rs 3,200. While IndiGo�s average fares across sectors in January comes to around Rs 3,815, a Kingfisher Airlines average ticket in the month of January costs Rs 4,008.

IndiGo offers Re 1 to Rs 99 base fare

MUMBAI: Budget air-carrier IndiGo will offer Re 1-Rs 99 base fare across most of its sectors from Friday, but it would still be not less than Rs

2,926 for a Delhi-Mumbai flight.

IndiGo would now be offering an all-inclusive fare of Rs 2,926 for sectors such Delhi-Mumbai, Delhi-Bangalore, Delhi-Chennai, Mumbai-Kolkata, a company release said today.

"We are happy to announce the introduction of Re 1-99 base fare on a majority of our flights," IndiGo Airline\'s president, Aditya Ghosh said in a release issued today.

The offer would, however, be valid only for tickets purchased 21-days in advance, it said.

The special fares are in line with the reduction in Air Turbine Fuel prices and aims at passing on the benefit to the passengers, the airline said.

"Lately, there has been a reduction in ATF prices and we want to pass the benefit to passengers immediately", he said.

Jet Airways to breakeven in FY10

Wolfgang Prock-Schauer, CEO, Jet Airways, expects load factor to be around 60-70% in domestic and mid-70% in international routes. "We are targeting mid-70% load factors in FY10."

Prock-Schauer said 2008 was a very bad year and that the company was recouping last year losses with the cooling off ATF prices.

According to him, Jet Airways will breakeven in the next financial year. "If ATF prices remain at current levels; Jet could post small profits in FY10. However, the FY10 profitability would largely depend on load factors and pick up in travel."

Business class travel is falling significantly around the world but Prock-Schauer sees a recovery in the aviation sector due to the lower ATF prices.

Here is a verbatim transcript of Wolfgang Prock-Schauer�s comments on CNBC-TV18. Also watch the accompanying video.

Q: Given the way ATF (Aviaiton Turbine Fuel) prices have come down and any uptick in load factors that you have seen. By which quarter do you think you will turn profitable and which financial year do you expect to post a full net profit?

A: As you mentioned, 2008 was a year where all negative factors come together. We had a big overcapacity situation in the industry and a record high of fuel prices, beginning of the recession, the financial meltdown and on top of that terror attacks in Mumbai. So, 2008 was a bad year for aviation. But now, the lowered ATF prices are reducing the losses.

To give you a precise projection by when we will be profitable, is premature. We are approaching a breakeven situation quite rapidly and now in the current scenario and I would think that by next financial year we should be in the breakeven region and then from there onwards be profitable again so that�s the way how I see it going.

The recession is here in most of the markets so the economy has also slowed down in India. But nevertheless fuel prices will go down and our capacity reduction has been implemented. We can achieve breakeven situation in the next financial year.

Q: If ATF prices hover somewhere close to the current levels, is there a reasonable chance of Jet posting a profit in FY10 or do you think you can�t say that with certainty yet?

A: Given situation there can be a small profit but I don�t want to promise too much in the current scenario because it will be difficult to assess how the global recession will affect aviation. Business class travel is dropping significantly all over the world. So, it will be very difficult to assess the situation. I would say that I am more optimistic today than I was 8-9 months ago, when crude prices were at USD 150 per barrel. The trend is going in the right direction. But there are a lot of unpredictable factors and for this reason I would like to speak to this given scenario.

Q: For the rest of the calendar year that is year 2009, what kind of fare cut do you expect to see over the next few months and what kind of average load factor do you think you would have?

A: We have implemented a reduction in the fuel surcharge already and we recently introduced a series of new fare initiatives, specifically apex fares where you can get very competitive fares. This could be in the magnitude of 5-10% drop in yield.

But on the other hand we have seen very positive direction towards this new fare category and in the recent Christmas break there was not too much traffic volume, but now we will see traffic picking up. So, we could operate between 60-70% in the domestic arena and internationally we have been already operating in the last couple of weeks or months in 70% or mid 70%, so it is doing reasonably well.

Q: There have been some concerns about how you are funding or meeting your working capital requirements. Can you confirm whether indeed a loan of Rs 1,000 crore has been taken by Jet and whether that�s involved any pledging of shares?

A: I cannot go into detail but what I can say is that we have sufficient funding for operation and we have secured sufficient working capital facilities to come over this difficult phase. It is quite obvious that banks have faith in our strategy and our positioning and our liquidity is secured and we have enough working capital facilities.

Q: Is it your expectation that throughout 2009 you will be more or less be able to hold on to more than 60% load factors and if you can do that will it more than offset the pressure on yields because of a reduction in rates?

A: Load factors in 2009 could improve further because of what we have done on the domestic side� we have taken out about 16% of our capacity in this year and we want to keep this capacity stable. Despite the fact the domestic market has declined in the recent month by about 15-20%, in the coming year we could see stabilisation and small growth. So if we keep our capacity stable and the market continues to grow at a modest rate at about 5% or maybe even 10%, we will see higher load factors. We should have a 70% load factors on the domestic front. That�s our goal.

Internationally, we have completely stopped our international expansion programme. With the stable capacity and continuous growth in the international traffic which we think will stay in the Indian aviation. We will be able to achieve load factors in mid-70\'s; at least I would say and that�s our goal and this is also an international benchmark figure. You have to operate at about 75% load factor minimum to be profitable in an international operation.

So overall, a combination of stabilisation of capacity and modest growth should enable us to achieve improvement in load factors.

Jet reduces fares for purchases up to 7 days in advance

NEW DELHI: The country\'s largest private airline Jet Airways on Monday introduced three-, five- and seven-day advance purchase fares for Business
Class customers on certain domestic sectors with immediate effect.

While the 3-day advance fares range from Rs 7,200 to Rs 8,100, tickets purchased atleast five day prior to the date of travel will cost between Rs 6,500 and Rs 11,500. The 7-Day advance fares would range from Rs 4,500 to Rs 17,500, the airline said in a statement.

The offer is valid for purchases made till January 31. A Mumbai-Vadodara ticket would be available for Rs 7,200 three days in advance, while tickets on Bhopal-Delhi flights would cost Rs 6,500 five days in advance.

A Guwahati-Kolkata tickets would be available for Rs 4,500 seven days in advance. The prices do not include taxes and surcharges, it said.

With the jet fuel price coming down continuously since September last year, carriers have been under government pressure to reduce air fares. Jet had recently announced Rs 250 basic fare for domestic flights for purchases made 21 days in advance