Year End Review 2007
1. INTRODUCTION
All of us are aware that India’s economy has captured world imagination and alongwith this Indian aviation has grown as a significant compliment.
2. BOOM IN AIR TRAVEL
The Civil Aviation Sector in the country has witnessed a boom as the domestic passenger carriage, cargo movement and international air traffic have shown exponential growth. This growth has been largely due to policy of increased liberalization both on domestic and international sectors. The year 2007 has been especially remarkable for the growth witnessed in passenger traffic. During the year 2007, domestic airline passenger traffic has shown a growth of 36.74% in first nine months (January to September, 2007) as compared to the corresponding period of 2006. Further, the scheduled domestic air services are now available to/from 82 airports as against nearly 75 in the year 2006.
3. INDIA AVIATION 2008
It has been decided to hold India Aviation 2008, an exhibition cum conference on Civil Aviation in October, 2008 at Hyderabad. The theme of the show is “Scaling new heights”. The show would include exhibitors both domestic and international from different areas like Airlines, Aircraft Manufacturers, MRO, Infrastructure companies, Airport services, security, management and maintenance.
4. NATIONAL CONFERENCE ON CIVIL AVIATION
As the aviation sector is experiencing an unprecedented growth, it has been felt imperative to constructively engage the State Governments and make them active partners in the development of civil aviation. The Ministry of Civil Aviation has scheduled a one-day conference on January 18, 2008 at the Ashok Hotel, New Delhi with the concerned State Ministers and the Chief Secretaries of all States/UTs so as to discuss various programmes and policies of the Government of India as well as to provide a forum for the States to project issues of concern to them.
5. LIBERAL APPROACH IN AIR SERVICES AGREEMENTS
In accordance with the policy of liberalization in the civil aviation sector and with a view to attract more foreign passengers, the Government has adopted a forward looking approach in the matter of grant of traffic rights under bilateral agreements with various foreign countries. The India-US aviation market has registered significant growth under the new revised Air Services Agreement signed between the two countries. During the year 2007, traffic rights were enhanced with Singapore, Cambodia, Jordan, UAE (Abu Dhabi/Dubai/Sharjah), Kuwait, Uzbekistan, Malaysia, Chile and Hong Kong. This would not only lead to more flights and better connectivity from these countries to India but also provide more competitive fares for passengers.
6. INTERNATIONAL OPERATION BY PRIVATE SCHEDULED AIRLINES ON INDIA-GULF SECTOR
The Government has decided to open the India-Gulf route to eligible private schedule carriers with effect from 1st January, 2008. Jet Airways has been permitted to operate international services to certain destinations in the Gulf region from 1st January, 2008.
7. ICAO GENERAL ASSEMBLY
In the ICAO General Assembly held in Montreal from 18th to 28th September, 2007, India was re-elected as a Member in the Council of ICAO for a period of 3 years.
8. LIMITED OPEN SKY POLICY
In order to ensure sufficient availability of seats during the peak winter season, India has been declaring a limited Open Sky Policy since 1999 – 2000 under which the designated airlines of foreign countries were being allowed to operate additional flights as well as upgrade their equipment. In keeping with this approach, the Government has permitted the designated foreign airlines to upgrade their equipment at their discretion on their existing frequencies during the period 1st December, 2007 to 31st January, 2008. Additional flights were not considered necessary, as liberalized traffic arrangements have been put in place with the main traffic generating countries in the recent past.
9. CAPE TOWN CONVENTION/AIRCRAFT PROTOCOL
The Cabinet has on 26.11.2007 approved India’s accession to the Cape Town Convention and the Aircraft Protocol. The principal objective of the Convention/Protocol is the efficient financing of mobile equipment. It is designed to establish an international legal regime for categories of high value and uniquely identifiable mobile equipments.
The economic benefits of the Cape Town Convention are significant. It is likely to reduce the risk applicable to asset-based financing and leasing transactions by establishing an international legal framework, backed by treaty relations and, where necessary, implementing domestic laws. The risk reduction will not only increase the availability of aviation credit at a cheaper cost, but will also broaden the spectrum of financing alternatives available to aircraft operators.
10. AIRCRAFT (AMENDMENT) BILL, 2007 (AMENDEMENT TO THE AIRCFART ACT, 1934
Keeping in view various developments in the civil aviation sector in the past few years, a review of the existing provisions of the Aircraft Act, 1934 was undertaken and it was considered necessary to carry out certain amendments to make it more effective and consistent with the present requirements.
Through the Amendment to the Aircraft Act, for ensuring Safety and Security Control, the Central Government will be empowered to make rules on:
# Licensing of personnel engaged in air traffic control.
# Certification, inspection and regulation of the Communication, Navigation and Surveillance/Air Traffic Management (CNS/ATM) facilities.
# Safeguarding civil aviation against acts of unlawful interference and ensuring civil aviation security since at present there is no legal provision under which the various orders on security are issued.
The existing power of DGCA has been enlarged to issue directions on:
# Regulation of air transport services (e.g. aircraft operations, air traffic control or maintenance and operation of any aerodrome, communications, navigation, surveillance and air traffic management).
# Prohibition of slaughtering and flaying of animals etc. within 10 kilometers radius of the airports.
A New clause in the Act has been added to exercise regulatory control on foreign registered aircraft coming to or flying over India.
Through these amendments it would be ensured that air travel in India continues to meet international safety and security standards.
11. CIVIL AVIATION COOPERATION PROGRAMME
An Aviation Cooperation Programme (ACP) has been signed with USA during the visit of the Minister (Civil Aviation) on 21-22 June, 2007, which is to be funded through US Trade and Development Agency (USTDA). The proposed ACP is a public/private partnership between the USTDA, the Federal Aviation Administration (FAA) and US Aviation companies. This Programme is designed to provide a Forum for communication between the Government of India and US public and private sector entities in India. The initial funding of the Programme is proposed through the public institutions of USA and private companies having stakes in aviation. The ACP’s specific objectives are:-
(i) To promote increased safety, operational efficiency and system capacity in the Indian aviation sector;
(ii) Facilitate and coordinate aviation industry training and technical ties between the U.S. and India; and
(iii) Strengthen overall US – India aviation cooperation.
12. IATA RESOLUTION 815
The Government of India has given approval for adoption of IATA Resolution 815, which will enable the implementation of the Cargo Accounts Settlement System (CASS), which is the equivalent of the Bank Settlement Plan (BSP) of IATA applicable for the passenger airlines. The CASS plan of IATA facilitates improved accounting and easy payment methods by the airlines to the cargo agents. However to protect smaller agents, the Government has approved the Resolution with two reservations.
13. DEVELOPMENT OF AIRPORT INFRASTRUCTURE
Development of airport infrastructure has been undertaken through the PPP route in major metro cities like Delhi, Mumbai, Bangalore and Hyderabad. Modernisation of the Kolkata and Chennai airports is being undertaken by the AAI. The aim of the government is to transform these airports into world-class facilities through this hybrid mechanism.
14. MODERNISATION OF DELHI AND MUMBAI AIRPORTS
The International airports in Delhi and Mumbai have been restructured and are being modernised through Private sector participation. The construction of first phase of Delhi airport started in January 2007 and is likely to be completed by March 2010. The cost of first phase of development is about Rs. 8,890 crores approximately. The construction work of Mumbai airport also started in January 2007. The airport will be saturated by 2014 with capacity of 40 million passengers per annum. The cost of development is Rs. 7000 crores approximately.
15. CONSTRUCTION OF AN INTERNATIONAL AIRPORT AT NAVI MUMBAI.
Government of India has given “in-principle” approval for the setting up of a Greenfield airport through Public Private Partnership (PPP) at Navi Mumbai, Maharashtra subject to certain conditions. The Ministry has set up a Steering Committee under the Chairmanship of Secretary, Civil Aviation and comprising of officials of the State Government, Ministry of Civil Aviation, City & Industries Development Corporation of Maharashtra Limited (CIDCO) and Airports Authority of India was set up during the year 2007 to monitor the implementation. Three meetings of the said Committee were held.
16. MODERNISATION/ EXPANSION OF KOLKATA AIRPORT
An Inter-Ministerial Group (IMG) under the Chairmanship of Secretary, Ministry of Civil Aviation, has approved the Action Plan for development of Kolkata airport. The proposal involves construction of an integrated terminal building to handle 20 million passengers per annum and airside works at a total cost of Rs.1942.51 crores for completion in June, 2010.
17. EXPANSION/MODERNISATION OF CHENNAI AIRPORT
An Inter-Ministerial Group (IMG) under the Chairmanship of Secretary, Ministry of Civil Aviation, has approved an Action plan for development of Chennai airport. The proposal involves expansion of international and domestic terminal building to handle additional 13 million passengers per annum and major airside work, including extension of secondary runway at a total estimated cost of Rs.1808 crores, for completion in June, 2010.
18. POLICY FOR GREENFIELD AIRPORTS
In order to streamline the policy framework for setting up of new airports an Inter Ministerial Group was set up to examine the extant procedures and recommend a new policy for Greenfield airports. The Draft policy finalized by the IMG was considered by the Committee on Infrastructure and approved it subject to resolution of certain issues by a Group of Ministers. The Group of Ministers has since met and considered these issues. The Policy would now be forwarded for consideration by the Union Cabinet. The Policy aims at providing a clear-cut architecture of the approval mechanism for setting up of new airports. Guidelines for granting technical approvals by various agencies involved in setting up of an airport would be provided upfront to provide clarity. A time bound process for approval of proposals received in this regard is also being suggested. The policy is likely to be finalized in a couple of months.
19. BANGALORE INTERNATIONAL AIRPORT LIMITED (BIAL)
Greenfield airport project at Devanahalli near Bangalore is being implemented on a Build Own Operate and Transfer (BOOT) basis for 30 years with Public – Private – Participation (PPP) at revised cost of Rs.2,470 crores. Government of Karnataka (GoK) and Airports Authority of India (AAI) together hold 26% equity and the strategic joint venture partners hold the balance 74%. The target date of opening of the airport is 30th March 2008.
20. HYDERABAD INTERNATIONAL AIRPORT LIMITED (HIAL)
A Greenfield airport is being developed in Shamshabad, near Hyderabad on BOOT basis with Public Private Participation (PPP) by the Government of Andhra Pradesh. The approximate cost of the Project is Rs.2,478 crores. AAI and Government of Andhra Pradesh together hold 26% equity with AAI’s equity being capped at Rs. 50 crores. The balance 74% being held by the strategic partner, a consortium consisting of M/s GMR Enterprises and Malaysian Airports Holdings Berhard (MAHB). The target date of opening the airport is 16th March 2008.
21. MODERNISATION OF 35 NON-METRO AIRPORTS
AAI has undertaken an ambitions project of modernization of 35 non-metro airports. As per a decision taken by the Committee on Infrastructure, airside work, including construction of terminal buildings, would be undertaken by AAI. Work on most of these airports has been taken up. The work at Agra Airport (Civil Enclave) has been completed and major work at 7 other airports viz. Agatti, Ahmedabad, Amritsar, Jaipur, Nagpur, Trichy and Udaipur is scheduled to be completed within the current financial year. It is expected that terminal buildings and associated air side works in respect of 24 airports will be completed by end March 2009 whereas remaining 11 airport would be completed by end March, 2010. City side development of 24 select non metro airports would be taken through PPP. The city side development includes commercial exploitation and maintenance of terminal buildings besides real estate development. RFQ for Amritsar and Udaipur has already been issued and, while the bids will be received by January, 2008, the initial response from prospective bidders has been promising.
22. ESTABLISHMENT OF AIRPORT ECONOMIC REGULATORY AUTHORITY (AERA)
With the objective of creating a level playing field, to foster healthy competition amongst all airports, encourage investment in airport facilities, regulation of tariffs of aeronautical services, protection of reasonable interest of users, operation of efficient, economic and viable airports, etc., it has been decided to set up an Airport Economic Regulatory Authority (AERA). The functions of the Authority shall be as under:
(a) to fix, review and approve tariff structure for the aeronautical services taking into consideration the capital expenditure incurred, the service provided, its quality and other relevant factors;
(b) to fix, review and approve users development fees which may be levied by service provider for development of an airport;
(c) to monitor the set performance standards relating to quality, continuity and reliability of service as prescribed by Central Government or its authorized agencies through concession agreement or such other agreement;
(d) to call for such information required to review the regulated tariff structure;
(e) to perform such other functions as may be entrusted to it by the Central Government or as may be necessary to carry out the provisions of this Act.
Airports Economic Regulatory Authority of India Bill, 2007 was introduced in the Lok Sabha on 5th September, 2007. The Bill has been referred to the Department - related Parliamentary Standing Committee on Transport, Tourism, and Culture for examination and report within three months. The Committee took Oral Evidence of the MOCA representatives on the Bill on 23.10.2007.
23. STREAMLING AND PROMOTING CARGO OPERATIONS
To streamline and promote the cargo operations, an Inter Ministerial Group is looking into various aspects of air cargo operations. Based on its recommendations, free time available for the cargo has been reduced to 72 hours from 5 days. The IMG is deliberating on additional steps to be taken to streamline the procedures relating to air cargo operations so as to make the operations more efficient. The cargo activities, at present, are much below the potential available in the country. One of the steps contemplated is to promote cargo operations through PPP at non-metro airports.
24. AIRPORT CONNECTIVITY
The Ministry has also taken up the issue of improving connectivity to major airports and selected 12 airports in the first phase. These are CSI Airport at Mumbai and the proposed Navi Mumbai, IGI Airport at Delhi and the proposed Greater Noida airport at Jawar, Chennai airport, Bangalore airport, Kolkata airport, Hyderabad airport, Ahmedabad airport, Cochin airport, Coimbatore airport and Jaipur airport. The Ministry has firmed up various connectivity plans for four of the above airports and is working on similar proposals for the remaining airports.
25. PROMOTION OF REGIONAL AIR CONNECTIVITY
To expand air connectivity on Tier II and Tier III cities and to promote regional air connectivity, a separate category of permit, Scheduled Air Transport (Regional) Services has been introduced. Accordingly, Director General of Civil Aviation on 28.08.2007 has issued Civil Aviation Requirements (CAR) stipulating minimum requirements for grant of permit to operate Scheduled Air Transport Regional Services.
Schedule Regional Air Transport Services means a Scheduled Air Transport Services which operates primarily in a designated region and which on grounds of operational and commercial exigencies may be allowed to operate from its designated region to airports in other regions, except metro airports of other regions.
The following airlines have been given initial No objection Certification to operate regional air transport services viz. Southern Region – M/s Star Aviation; Northern Region – M/s Jagson Airlines and M/s MDLR Airlines Pvt. Ltd.
26. INCREASING CONNECTIVITY IN NORTH EAST STATES
With regard to air connectivity in the North East region, scheduled domestic airlines are operating 296 flights/week to and within the North East region including six freighter services per week operated by Alliance Air.
27. AUGMENTING HELICOPTER SERVICES FOR NON-ACCESSIBLE AREAS AND TOURISM
The year 2008 is being declared as year of Helicopter services. Ministry has approved a large number of proposals for helicopter acquisition/import. During the year PHHL has inducted two additional Dauphin N3 helicopters. With the above acquisitions, the total fleet size of the Company has been enhanced to 35 helicopters.
Presently passenger services are being provided by PHHL to Kedarnath & Badrinath Dham and Amarnath during yatra seasons. There are also plans to further diversify/connect to important adjoining tourists/tourism places in Uttaranchal such as Ghangharia, Hemkund Sahib etc., subject to necessary permissions. Important tourist destinations in Tamil Nadu – Coimbatore, Madurai, Kodaikanal, Rameshwaram, etc. in Puducherry – Chennai-Karaikal-Puducherry sector and in Uttarakhand etc. will also be started.
28. CONSTRUCTION OF HELIPORTS
PHHL has a plan to construct a Heliport in NCR to meet the significant and growing demand for helicopter services both in the government and business sector. Accordingly, DDA and NOIDA has been approached for allotment of land for the proposed heliport. Proposal to set up a heliport in South Mumbai is also under consideration.
Ministry of Youth Affairs and Sports (M/o YA&S) has also been approached for inclusion of the project in the overall scheme of Commonwealth Games arrangement so that the various requirements related to this project are met on a fast track basis and the proposed heliport can be showcased as an additional facility for the Commonwealth Games.
29. CONTINGENCY MEASURES ON AIRPORT SECURITY
As a preventive security measure contingency plan has been put in place. AVSEC manual giving detail standard operating procedures for operating the contingency plan has been finalized and issued to all concerned. Bureau of Civil Aviation Security (BCAS) is regularly conducting Aviation Security Audits and Inspections to ensure compliance of all aviation security measures by Airport and airlines operators. The Aviation Security Quality Control Plan is prepared and implemented by the BCAS. The areas identified for introducing advanced technology are Access Control, Perimeter Security, X-ray Baggage Inspection System and Detection of Explosives. Apart from it, BCAS/AAI have been directed for standardization and upgradation of security equipments for aviation security at airports. So far, CISF has been deployed at 54 airports.
30. PROCESS RE-ENGINEERING IN DGCA
Due to the exponential growth of air traffic in recent years, there is a mismatch in growing workload and the existing strength, resources and infrastructure of DGCA, especially, manpower, which has been static over a decade. The workload and responsibilities of DGCA official increases with the growing number of aircraft in commercial and general aviation. KAW Committee had also recommended the restructuring and strengthening of DGCA. There is a need to keep the office of DGCA in a dynamic state to keep pace with the challenges thrown by exponential growth of civil aviation in India. The process of re-engineering of DGCA has been initiated by developing systems like IT based online examination, outsourcing of pilot examination (which will be introduced by early next year) etc. The manpower of DGCA is also being reviewed to ensure the highest standard of Air Safety in India.
31. OBSERVANCE OF AVIATION SAFETY WEEK, 10-15 DECEMBER, 2007
An Aviation Safety week was organized by Airports Authority of India and Directorate General of Civil Aviation under the auspices of Ministry of Civil Aviation from December 10-15, 2007 to sensitize the general public about aviation safety issue. Seminars and workshops were organized during the week and series of advertisements were released in leading newspapers to make the public aware about Government efforts to ensure aviation safety.
32. ACQUISITION OF AIRCRAFT BY AI/IA
Air India
Air India has signed a purchase agreement with Boeing Company for the purchase of 68 aircraft comprising 8XB777-200LR, 15XB777-300ER and 27XB787-8 all powered with GE engines for Air India and 18XB737-800W all powered with CFM engines for Air India Charters Limited (a subsidiary of Air India). The net project cost of 68 aircraft to be acquired by Air India is estimated to be Rs.34,615 crores.
The delivery schedule of 50 Aircraft of Air India and 18 aircraft of Air India Express is as under:
Air India B777-200LR 08 June 2007 through June 2009
B777-300ER 15 June 2007 through August 2011
B787-8 27 Sept. 2008 through Oct. 2011
AICL B737-800 18 Dec. 2006 through Oct.2009
Air India and Air India Express have taken delivery of 3 and10 aircraft respectively.
Indian Airlines
With the approval of the government, erstwhile Indian airlines Limited (IAL) had signed an agreement with Airbus Industries and CFM International on 20.02.2006 for procurement of 43 Airbus family aircraft, comprising 19 A-319, 4 A-320 and 20 A 321 all fitted with CFM 56-5B engines, at an estimated cost of Rs.9890 crores. In flight Entertainment System (IFES) would also be fitted in 43 of these aircraft at an estimated cost of Rs.279 crores.
The Indian Airlines has already received seven A-321 aircraft. The aircraft equipped with State-of-the-art avionics and in-flight entertainment systems has been pressed into services.
The schedule of supply of the remaining aircraft is as follows:
Year Number of Aircraft
2007 04
2008 08
2009 17
2010 07
33. MERGER OF AIR INDIA AND INDIAN AIRLINES
The Cabinet in its meeting held on 1st March, 2007 approved the proposal to merge Indian Airlines and Air India. Accordingly, a new company viz. National Aviation Company of India Limited (NACIL) was incorporated on 30th March, 2007 with its headquarters at Mumbai. The brand name of the new airline is Air India and its logo is Maharaja. The Ministry of Corporate Affairs approved the merger of Air India and Indian Airlines with National Aviation Company of India Limited on 22nd August, 2007 and issued a Certificate to this effect on 27th August, 2007. With this approval, the Board of Directors of erstwhile Air India and Indian Airlines stand dissolved. Shri V. Thulasidas and Shri Vishwapati Trivedi have taken over charge of CMD and Joint MD respectively of NACIL w.e.f. 27.08.2007 in accordance with this Ministry’s order of 13.06.2007. Further with the approval of the ACC, Board of Directors of NACIL was re-constituted on 18th September, 2007. A 3-tier Grievances Redressal Machinery to address the employee’s grievances has been set up in Air India.
34. STAR Alliance
Air India has been invited to become the member of Star Alliance. The CEOs of Star Alliance member airlines at their Annual Board Meeting in Beijing on 13 December 2007 voted to accept the application of Air India to become a future member of the Star Alliance. The Star Alliance network, which was established in 1997 as the first truly global airline alliance, seeks to offer customers worldwide reach and a smooth travel experience. Star Alliance was voted Best Airline Alliance by Business Traveller Magazine in 2003, 2006 and 2007 and by Skytrax in 2003, 2005 and 2007.
This invitation comes in the wake of Air India’s merger with India’s leading domestic carrier Indian Airlines, thus making Air India the prime player in the Indian subcontinent. In addition, the recently announced fleet expansion of over 100 aircraft would enhance Air India’s operations in terms of global reach and services. The specialised teams at Air India, Star Alliance and its member carriers will now be working on the integration process, which once completed, will make Air India a part of the Star Alliance network.
35. NATIONAL FLYING TRAINING INSTITUTE AT GONDIA, MAHARASHTRA
The Ministry plans to establish a premier pilot training institute at Gondia, Maharashtra to augment the ongoing efforts of Flying Training Schools for increasing the number of qualified and well-trained pilots, to tackle the huge demand for pilots in the industry. In this context, to enable the training of the pilots, the proposal for development of Birsi aerodrome at Gondia has been approved.
36. INDIRA GANDHI RASHTRIYA URAN AKADEMI (IGRUA)
For suitable modernization, renovation and upgradation of infrastructure of IGRUA, with a view to enhancing the number of trainees being trained at IGRUA from 40 to 100 per course for Commercial Pilot Licence (CPL), two projects have been approved. These are:-
(i) Project for upgradation of existing training facilities at IGRUA at an estimated cost of Rs. 21.82 crores and
(ii) Augmentation of training facilities like acquisition of single and multi engine aircraft and modern training equipment at a cost not exceeding Rs.41.30 crore. The selection of suitable trainer aircraft is underway.
To induct professionalism of management in IGRUA, a Management Contract has been entered by IGRUA with M/s. CAE Canada and the terms and conditions of the contract are being negotiated.
37. HIGHLIGHTS OF COMMISSION OF RAILWAY SAFETY-2007
Detailed checklists have been introduced for sanctions of the various works like introduction of new rolling stock, condonation of infringements to schedule of dimensions and minor works like bridge works etc. facilitating the smooth working of the system and fast disposal of the cases. This has been implemented all over Indian Railways.
38. HAJ 2007 Operations
The current Haj operations (Haj 2007) to carry Haj pilgrims to Jeddah/Madinah and back commenced on 11th November, 2007. Saudi Arabian Airlines and National Aviation Company of India Limited will carry around 1,10,000 pilgrims to Jeddah and back. Varanasi has been added as a new embarkation point for Haj 2007 and with this the number of embarkation points has gone up to 16, which are Ahmedabad, Bangalore, Chennai, Calicut, Delhi, Patna, Hyderabad, Jaipur, Kolkata, Lucknow, Mumbai, Nagpur, Srinagar, Guwahati, Aurangabad and Varanasi.
