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 ‘log’ 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Air India, Jet Airways and Kingfisher Airlines have earlier once withdrawn agent commission but had to soon restore it under pres-sure from thousands of travel agents across the country.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.
Domestic airlines asked to cut capacity, align flights
Saturday, April 11th, 2009The civil aviation ministry has asked domestic air carriers flying to foreign destinations not to compete with each other and align schedules of their flights for better returns. Early this week, ministry officials asked air-carriers to get rid of excess capacity on both foreign and domestic sectors and also reduce transit time to save on operational costs.
The suggestion was necessary as domestic airlines such as Air India, Jet Airways and Kingfisher are set to lose over Rs 8,000 crore due to stiff competition and rising jet fuel in 2008-09, a ministry official, who was present in the meeting, said.
Air India, Jet Airways and Kingfisher have already started rationalising routes and reduced capacity, he said requesting anonymity. The meeting, called to discuss ways to enhance operational efficiencies, was attended by executives of domestic airlines, airport operators and aviation regulator.
Domestic passenger traffic dips 7% in Feb, despite fare cuts
Saturday, April 11th, 2009Domestic air passenger traffic is likely to continue its negative trend in March despite aggressive fare cuts by airlines since January, according to initial estimates provided by travel agents.
Airlines witnessed a 7% drop in passengers during February compared with the year-ago period, according to data released by the Director General of Civil Aviation (DGCA). In January, the number of domestic air passengers fell to 3.32 million, compared with 3.33 million last year, it said.
DGCA is scheduled to come out with its passenger figures for March, by the month end. According to Amadeus India MD Ankur Bhatia, “Though domestic airlines have cut fares by almost half in the January-February period, the number of passengers keeps declining. There is no recovery in passenger load.” Amadeus is a global technology and distribution partner to the travel and tourism industry.
Goldman: Civil aerospace downturn may be ‘more severe’
Saturday, April 11th, 2009The downturn in the civil aerospace sector is expected to be more severe than previously estimated mainly due to a decline in world air traffic and global gross domestic product, said Goldman Sachs, which downgraded Rolls Royce Group by a notch to “sell”.
A further double-digit drop in world international air traffic data, which fell 10.1 per cent for February — the worst decline since the current crisis began, could put Airbus and Boeing under pressure to cut production schedules for the second half of 2009 and 2010, Goldman said.
The brokerage also said: “We believe further double-digit declines are likely for several more months as consumers and businesses seek to preserve cash in the face of economic uncertainty.”
Domestic air passenger traffic likely to plunge further
Saturday, April 11th, 2009Domestic air passenger traffic is likely to continue its negative trend in March despite aggressive fare cuts by airlines since January, according to initial estimates provided by travel agents.
Airlines flew 7% fewer passengers during February compared with the year ago period, data released by the Director General of Civil Aviation said. In January, the number of domestic air passengers fell to 3.32 million, compared to 3.33 million last year, the DGCA data said.
The Director General of Civil Aviation is scheduled to come out with its passenger figures for March, by the end of this month. Amadeus India managing director Ankur Bhatia said: “Domestic airlines cut fares by almost half in the January-February period, but the number of passengers keeps declining even now. There is no recovery in passengers load.” Amadeus is a global technology and distribution partner to the travel and tourism industry.
As jets lag, pre-paid model takes to the skies
Saturday, April 11th, 2009Private jet-setting is going the mobile telephony way, with the slowdown forcing small aircraft leasers to issue pre-paid packages
Jetliners such as BJETS, VistaJet and Club One Air now offer pre-paid ‘timeshares’ in which you can buy a fixed 25-hours “all-expenses-included” flying package for Rs 2.7 lakh or Rs 3.5 lakh per hour, with a validity of one year, and fly to any part of the world.
The trend was kicked off by VistaJet, Europe’s largest private jet carrier, which opened shop last month in India. “We are ready to close some new deals in the next two weeks. We offer a 7-seat Learjet 60 aircraft at $5,500 (Rs 2.7 lakh) per hour. It’s much cheaper than any other model in the market, as users don’t have to bear the expenses of crew stay, meals or fuel,” says Ankur Bhatia, executive director, Bird Group, which markets VistaJet in India.
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.
Foreign airlines may own stakes in Indian carriers
Friday, January 2nd, 2009The government is considering a proposal to allow foreign airlines such as Singapore Airlines, British Airways and Lufthansa to pick up equity stakes in domestic carriers, but with riders.
It is preparing the ground for a major policy shift on foreign ownership in aviation. Government sources say foreign airlines may be allowed to own a 20-25% stake in local carriers, but their role on boards and in the management would be limited.
The civil aviation ministry had, in the past, argued that allowing larger foreign airlines to own stakes in fledgling Indian carriers could cause harm to the domestic aviation sector.
“Things have changed. Earlier, only one Indian airline operated internationally. But now, three domestic carriers fly to foreign destinations. Our carriers have grown in size and scale in three to four years’ time. We don’t think the earlier concerns are relevant. If foreign telecom companies can buy stakes in Indian telecom companies, why can’t foreign airlines pick up stakes in domestic airlines?” a government official asked, on the condition of anonymity.
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 carriers cut jobs, capacity to stay afloat
Wednesday, October 22nd, 2008Indian carriers, buffeted by softening demand, mounting losses and high jet fuel prices, are resorting to job cuts and reducing capacity to stay afloat.
Carriers have halted expansion plans and an alliance of the country’s top two carriers, Jet Airways and Kingfisher Airlines, is looking to return 14 narrow bodied planes.
Discount carrier SpiceJet cut 19 daily flights of its 117.
Kingfisher said it would reduce the salary of 50 trainee co-pilots, while state-run Air India plans to offer 3-5 years unpaid leave to 15,000 employees in non-core operational areas.
Kingfisher and Jet set up an alliance on Oct. 13 for code sharing, sharing of ticketing, ground services, fuel management, crew training and utilisation.
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Mumbai international airport leads in online check-in worldwide: SITA survey
Wednesday, October 22nd, 2008A global survey by SITA has found that Indian travellers use the web more often for flight bookings and check-in than others. The survey also found that Mumbai leads six of the world’s busiest airports when it comes to web check-in ahead of Atlanta with a score of 19.3 per cent, as compared to the latter’s 18 per cent.
SITA, a specialist provider of information technology (IT) solutions to airlines and airports said there is overwhelming evidence from passengers surveyed at six of the world’s busiest airports across five continents that self-service is fast becoming the norm for passengers from Mumbai to Atlanta.
The first ever global survey to look at use of Passenger Self-Service at a major Indian airport, Mumbai International, has found that Indian travellers use the web more than often for flight booking and check-in.
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.
Use derivatives to deal with turbulence in the air
Friday, September 26th, 2008India’s aviation industry has just a 2% share in the $470-billion global industry, but accounts for a third of its total losses. Blame the fuel cost volatility and high capital expenditure.
If the market turbulence lasts longer, domestic carriers may not be able to sustain their business unless major structural changes are carried out. Interest and fuel costs need to stabilize. This will allow carriers to adjust fares and thereby keep demand stable for a long period.
In a falling economy, the aviation industry would normally be one of the early birds to hit the air pocket. The reason is intense competition from other transportation modes and the growing ICT infrastructure that can somewhat obviate travel.
Airline sector hit by ‘perfect storm’: IATA
Friday, September 26th, 2008Airline sector has moved into negative growth and urgent reforms are needed if it wants to survive a “perfect storm” hitting the industry, an association said Wednesday.
Growth has slowed from 33 per cent in 2007 to 7.5 per cent for the first six months of this year, Giovanni Bisignani, director general and CEO of the International Air Transport Association (IATA), told business leaders here.
“The global crisis resulting from high oil prices and declining traffic is hitting India hard,” Bisignani said, adding the last two months “have been negative.”
“Indian carriers could post 1.5 bn dollars in losses in 2008, the largest outside the US. Urgent action is needed to help Indian carriers weather the perfect storm of high costs and falling demand,” he said.
Claustrophobia in the air
Friday, September 26th, 2008Claustrophobia is usually described as a fear of enclosed places. A more accurate description might be “a fear of not having an easy escape route”. 2008 has seen 111 air safety incidents worldwide, almost half of which resulted in fatal or ‘hull-loss’ accidents. While the total number of hull losses was more than the 10-year average, the death toll in these accidents was less.
This spurt in the accident rate has spurred the safety conscious world into action. The National Transportation Safety Board and FAA have initiated action to address fatigue as a factor in accidents. There is a concerted move to reduce the duty time and increase the rest period of pilots.
Some of the accidents resulting in loss of lives or complete destruction of the aircraft should raise concern in India. The British Airways 777 accident in London Heathrow, has been attributed to fuel contamination because of ice formation. The aircraft had flown under extremely cold conditions. Safety recommendations have been initiated to overcome this problem. While approaching Heathrow airport, the aircraft experienced a sudden partial power loss on both engines, and the aircraft crashed short of the runway. Emergency services were able to reach the aircraft within seconds.
On August 20, 2008, a Spanair Flight JK5022 carrying 172 people on the MD-80 aircraft, crashed immediately after take off and 154 people died in that accident. The investigation report is yet to be published. There is a suspicion of overloading and a power loss on take-off. The crash took place within the airport perimeter and fire service equipment was able to reach the site immediately.
On September 14, 2008, Aeroflot-Nord flight 821, a Boeing-737-500, belonging to a branch of the national airline Aeroflot, was on a flight from Moscow to Perm, near the Ural mountains. It crashed short of the runway, killing all 88 on board. The accident site was near the trans-Siberian railway track and it shut down rail traffic for a considerable period of time.
