Capt G R Gopinath, who sold the low-cost carrier Air Deccan in 2007 to Kingfisher Airlines, has incubated a new project: Deccan Cargo & Express Logistics. Despite losing the Lok Sabha election, where he hoped to represent Bangalore in the lower house of Parliament, he is upbeat about his recently launched air cargo business. In a freewheeling interview with ET, Deccan Cargo & Express Logistics CMD Capt Gopinath explains why his cargo business will revolutionise the sector and what the new government could do to alter the aviation scenario.
Archive for the ‘invt’ Category
Major airlines plan portal to save on commission
Sunday, May 17th, 2009Domestic air-carriers Kingfisher Airlines, SpiceJet and IndiGo have found a way to save on agent commission and service charge. The three, under the banner of Federation of Indian Airlines (FIA), are planning to launch a travel portal — rang7 — to sell air tickets. The industry body is expected to take up the proposal in its next meeting, a person familiar with the development said.
Air India, Jet Airways and Kingfisher Airlines have earlier once withdrawn agent commission but had to soon restore it under pres-sure from thousands of travel agents across the country. According to industry estimates, distribution of air tickets through travel agents and travel portals such as Makemytrip.com and Yatra.com costs airlines nearly Rs 200 crore annually.
Confused aviation?
Tuesday, March 31st, 2009Civil aviation in India is in a confused state. The question that arises: “Is it civil aviation or corrupt aviation”? A reality check on the progress of aviation during the last five years exposes the level of rot in the system.
Utopian claims have been made about growth prospects and growth rates in aviation. A case in point is the recent statement by the airport director of Chennai that the passenger numbers in 2010 is expected to be 24 million(?). In 2008, all the airports together handled only about 34 million passengers.
The International Air Transport Association (IATA) has predicted a dismal 2009, and yet tall claims are being made. Also, the airport infrastructure makes mockery of our credibility.
Recently, a team from the Federal Aviation Agency (FAA) of the US carried out an audit of Indian aviation. The threat of India being downgraded to Category 2 has been given a fresh lease of life. We have until June to set right all the deficiencies that warrant this downgrade. These are not deficiencies that cropped up recently.
Investor Wilbur Ross wants grand 3-way alliance in skies
Tuesday, March 31st, 2009Billionaire investor Wilbur Ross is trying to stitch together a mega alliance in the skies to create India’s second-largest airline according to a top aviation industry executive. This top executive who did not wish to be named told ET that Ross, who had pumped money into SpiceJet last year, is now working towards bringing on board — Jetlite and GoAir. His eventual plan, the official said, is to integrate the three low-cost carriers to create a combined entity which will command a market share of around 22.5%, way ahead of Indigo, which is currently the largest low-cost airline with 13.2% market share. Currently, Vijay Mallya’s Kingfisher Airlines is India’s largest carrier with a 27% share of the Indian skies.
Israel displaces Russia as top military supplier to India
Tuesday, March 31st, 2009Israel has displaced Russia as the leading weapons partner of India, signing contracts worth more than $1 billion for both the years 2007 and 2008. These contracts overhaul the Russian average of $875 million for both the years.
According to Israeli Maj Gen Udi Shani, director of the defence ministry’s Sibat export agency, Israel now shares a very special defence relationship with India. He was quoted by the Middle East Newsline as saying that both countries were now moving towards joint development of equipment.
Maj Gen Shani, on a visit to India in mid-February, apparently revealed that Israel and New Delhi were also discussing several defence projects, in addition to the ongoing ones. These projects would lay stress on reconnaissance and air defence.
Air craft maintenance service in India from next year
Wednesday, March 4th, 2009Maintenance, repair and over haul services for aircrafts will be available in India for the first time from October 2010.GMR Infrastructure Ltd said on Friday that its unit GMR-Hyderabad International Airport Ltd (GMR-HIAL) and a wholly-owned unit of Malaysia Airlines will set up a 50:50 joint venture for airframe maintenance, repair and overhaul services (MRO). This move is expected to bring down the cost of maintenance of 350 odd aircrafts which are currently operating in India.
With MRO facilities becoming available in India, airlines are expected to save 10% -12% on cost of maintenance. Industry analysts also pointed out that till now while sending the carriers for maintenance to overseas operators used to loss out as it will be out of operation for 4 to 8 days. With the facility being available in India, airlines which are already reeling under losses are expected to get a breather on the low cost of maintenance and lesser down time. Airlines including Jet Airways and Indigo has already expressed interest in using the MRO facilities that will be available in Hyderabad.
Ram Charan boards Gopinath’s cargo start-up as an advisor
Friday, December 26th, 2008Iconic business strategist Ram Charan is boarding Capt GR Gopinath’s start-up logistics company Deccan Express as an advisor. The new
venture is expected to kick off in May next year with a fleet of six cargo aircraft connecting 14 locations and supported by a trucking service that will reach out to 68 places across the country.
“Ram Charan will be on the company’s advisory panel, guiding the CEO and operational team every quarter. We are gearing up to launch services in May-June, with a fleet of three Airbus 310s and three ATRs having 14 air touchpoints. We will be the largest and double the size of existing industry players on day one,” Capt Gopinath, chairman & managing director, Deccan Express Logistics, said. Three more ATRs will be added to the fleet subsequently.
Aircraft maintenance has $1-bn business potential in India
Wednesday, October 22nd, 2008Indian aviation industry may be going through turbulent weather, yet experts see a growing potential for the maintenance, repair and o
verhaul (MRO) segment of the industry, with projected revenue of $1.07 billion by 2013.
Many companies, including Boeing in a tie-up with the state-run Air India, have announced joint ventures in MRO business and others are waiting in the wings for the government to address some tax issues to jump into the market, the experts added.
Speaking during an MRO Asia symposium here, C.S. Tomar, vice president of engineering and maintenance for Kingfisher Airlines, said the MRO market in the country was currently valued at $405 million with a potential for $1.6 billion by 2018.
"It makes economical sense for us to set up an MRO facility," Sitham Nadarajah, vice president for technical development with Jet Airways, told IANS. "With volumes increasing, we will be looking at D-checks for narrow bodied aircraft like Boeing-737s."
The D-checks are done on aircraft every four-five years, during which the aircraft is completely stripped, checked and then restored.
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Indian aerospace sector to generate $30 bn offsets opportunities
Wednesday, October 22nd, 2008The technology-driven Indian aerospace sector would generate around $30 billion in offsets opportunities in India in the coming years, according to Indian Air Force (IAF) chief, Air Chief Marshal Fali Homi Major.
The India Strategic show daily for the India Aviation 2008 released here Tuesday quoted the air chief as saying that the IAF was under an unprecedented "transformation" requiring an investment of around $100 billion for aircraft, equipment and infrastructure over the next couple of decades.
Under the Defence Procurement Policy (DPP), first enunciated in 2006 and fine-tuned earlier this year, 30 percent of the value of all defence contracts has to be reinvested in the country.
The IAF has already inked a $1 billion deal with US aerospace major Lockheed Martin for purchasing six C-130J transport aircraft. In addition to this, it is evaluating bids for 126 combat jets in a deal that is valued at around $10 billion.
Boeing’s India arm may bid for $20-b defence deals
Friday, September 26th, 2008The Indian subsidiary of Boeing Co, Boeing International Corporation India Private Ltd (BICIPL), is looking to bid for the $20-billion worth defence aircraft orders expected in India over the next 10-15 years.
“As a company half of our revenues come from the defence sector, so we are actively working with the Ministry of Defence to compete for a number of opportunities in India,” Dr Ian Thomas, President, Boeing India, said on the sidelines of a conference here on Thursday.
Patrol aircraft
The company plans to bid for the maritime patrol aircraft, fighters in the form of the F-18 Super Hornets, heavy lift helicopters, attack helicopters and host of other opportunities that the sector offers.
In addition, it is also eyeing orders for 1,001 commercial airplanes worth over $105 billion that India would require over the next 20 years.
Dr Thomas said, Boeing in India is also very much engaged in the productivity side by building a number of long-term strategic partnerships in key areas such as information technology, business process and knowledge sourcing, engineering, R&D activities and components.
It is also in talks with Tata Industries for its proposed joint venture company that will make aerospace components.
Boeing and Tata had signed a pact to form a joint-venture company that will initially invest $500 million for defence-related aerospace component manufacturing in India.
India can tap outsourcing avenues in aerospace: Airbus
Monday, September 15th, 2008With the European aerospace industry looking at cutting costs, India can become an important outsourcing destination, an official of aircraft major Airbus Industries said here on Friday.
“Airbus is into cutting costs by outsourcing components. In future, we will outsource engineering as well as production jobs,” Martin Kraus, who heads Airbus A400 Military Systems, said here.
According to him, the challenges faced by Airbus in the civilian segment are increased competition from aircraft manufacturers in Brazil and China, low value of the American dollar and volatility in oil prices.
In the military segment, the defence budgets of European countries are coming down; Kraus said during his address at Connect 2008, an information, communication and technology meet organised by the Confederation of Indian Industry (CII).
Satyam aims to strengthen presence in aviation services
Monday, September 15th, 2008Satyam Computer Services Ltd has roped in senior officials, including retired, from Boeing, Airbus, Cadence and Bombardier to strengthen its aviation practice.
Mr John Douglass, former president and Chief Executive Officer of Aerospace Industries Association of America, which represents US aerospace manufacturers, will join Satyam as an advisor. He is also an advisor to the Senator, Mr Barack Obama, the Democrats’ Presidential candidate.
“Mr Douglass has accepted our offer,” said Mr Subu D. Subramanian, Director and Senior Vice-President, Satyam.
Govt finalizes guidelines for greenfield airports
Saturday, September 6th, 2008The government, on Thursday, finalized the guidelines for setting up greenfield airports. All the proposals for the new airports will be routed through the steering committee. The civilian aviation ministry will serve as the secretariat of the starting committee of the Greenfield policy.
India may become manufacturing hub for Airbus 350 XWB jets
Saturday, September 6th, 2008Indian aviation may be in the dumps currently with airlines cutting down on operations and passengers gravitating towards trains, but aircraft manufacturer Airbus continues to remain upbeat about its future in India. Not only is the European major expecting the next wave of orders from India’s airlines in three to four years’ time, it is also considering the country as one of the key centres for design and development of its long-haul A350 plane, set to take on rival Boeing’s much publicized 787 Dreamliner.
”As Air India, Jet Airways and Kingfisher Airlines look to compete in the international arena there is likely to be need for more aircraft. We expect that the next big wave of orders will come in 2011-12 by when these airlines will have completed the delivery of the aircraft already ordered. The airlines will need aircraft to continue on the growth path that they have embarked on. Besides, there will also be need for freighter aircraft,” Dr Kiran Rao, Executive Vice- President, Sales and Marketing, Airbus, said.
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Upgradation of Chennai & Kolkata airports gets Cabinet nod
Tuesday, August 19th, 2008The government on Thursday approved modernisation of the Chennai and Kolkata airports. Expansion of the two airports is estimated to cost over Rs 3,750 crore and these projects are to be completed within three years. The entire modernisation work would be taken up by the Airports Authority of India (AAI) beginning September this year. AAI will invest 80% of the required capital through internal resources, and the remaining 20% would be borrowed.
While the Kolkata airport would be developed at an estimated cost of Rs 1,942.51 crore, modernisation of the Chennai airport would cost Rs 1,808 crore. The Kolkata project would be completed within 30 months of awarding the contract, while the Chennai project would have a lower implementation period of 26 months.
Cabin Crew Direct to set up seven training centres along with Kuoni India
Tuesday, August 19th, 2008Global aviation training and recruitment major, Cabin Crew Direct, will set up seven cabin crew training and recruitment centres in the country. The UK-headquartered firm said it would run the centres in collaboration with Kouni India, a subsidiary of Switzerland-based Kouni International.
The service provider said it plans to place around 70-80 cabin crew executives with major global airlines by end of the year. “We have just set up the first centre in collaboration with Kouni at New Delhi and would be opening six other centres at Mumbai, Chennai, Bangalore, Ahmedabad, Hyderabad and Chandigarh soon,” Cabin Crew Direct chief executive officer, John Ellis, said.
Deccan Express to raise funds worth $200 m
Tuesday, August 19th, 2008Deccan Express Logistics, an air and ground distribution network company formed by Capt. G.R. Gopinath, plans to raise $200 million to fund the project, which is expected to become operational by the first quarter of the next financial year.
The company has appointed Edelweiss, an investment banking and financial services company, to arrange for funding from private equity and help it with a business model to run its fully integrated logistics service.
Capt Gopinath told Business Line that he hopes to raise $70 million in the next four months, while the remaining funds were expected to be arranged within three years with the help of Edelweiss.
Plane leasing market hits an air pocket
Tuesday, August 19th, 2008Lease rentals for aircraft in global markets have fallen by 15-20 per cent over the past four months, which dealt a further blow to bleeding Indian carriers looking at sub-leasing their aircraft to other airlines in order to shed excess capacity.
With losses of over $ 2 billion expected by the aviation industry this year, airlines have been looking at various ways to cut capacity and reduce the number of flights. One way has been to sub-lease their existing aircraft to another carrier which wants quick delivery at a premium, especially if it comes with a crew and pilot also. This market is now drying up.
“Demand and supply equations have changed in the aviation market space because of the fact that 25 airlines have closed down and airlines worldwide are reducing and redrawing capacity. This has resulted in softening of the lease rental market by 15-20 per cent and is likely to slide further in the second quarter of the current fiscal,” said Kapil Kaul, CEO (Indian sub-continent and Middle East) Centre for Asia Pacific Aviation.
Fly to airport on Deccan`s limos
Saturday, July 5th, 2008Deccan Aviation, India’s first helicopter charter company on Tuesday launched a helicopter charter service to ferry people between the Bangalore International Airport (BIA) in Devanahalli and select IT hubs in the city.
The service, christened Skylimo, is the first of its kind air taxi service to be launched from any airport in the country.
The company will commence services from July 2. To begin with, it will fly between BIA and Electronics City, Whitefield and HAL Airprot. It will soon add Bangalore Palace grounds.
The company has deployed a four-seater Bell 206 JetRanger helicopter. Initially, the skylimos service is available only during the day, from 6.30 am to 6 pm, and will cover the distance in 15-20 minutes.
The fare for these charters is in the range of Rs 4,800 per person to Rs 5,800 per person per trip. Deccan Aviation has built a helipad within the BIAL premises, about a kilometre from the airport.
Airlines stuck with idle planes
Saturday, July 5th, 2008Having cut down on flights, Indian carriers are now faced with a new problem: What to do with the idle aircraft?
The worldwide softness in the sector has ensured there are few takers for these aircraft; those who had leased the aircraft to Indian carriers will invoke a hefty penalty if the machines are sent back to them.
Reeling under record jet fuel prices and rock-bottom fares, this is the latest thorn in the side of Indian airlines. None is yet to arrive at a solution.
The problem, to be sure, is not small. Out of the 300 odd aircraft with these airlines, there is an excess capacity of 15 per cent, or roughly 45, experts reckon.
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