India’s crowded airline sector is flying into huge losses on the back of a surge in global fuel prices that have forced it to hike fares, slowing explosive passenger growth.

Its woes pushed the airlines to a combined loss of 938 billion dollars in the fiscal year to March 2008 and Aviation Secretary Ashok Chawla says the figure could double this year if oil prices remain at current levels.

The forecast represents nearly a third of total global losses of 6.1 billion dollars projected by the International Air Transport Association last week if oil stays around 135 dollars until year end.

“Aggressive consolidation is inevitable,” said aviation consultant Kapil Kaul, who sees a shakeout in India, where a rush of new carriers created overcapacity and led some airlines to offer fares cheaper than train tickets.

“There will be exits, strategic alliances, airlines will have to work out how to share resources and rationalise route networks so carriers complement each other rather than compete,” Kaul told AFP.

Right now India’s airlines are losing an average 30 dollars a passenger, said Kaul, India head of the Centre for Asia Pacific Aviation.

Cheaper fares amid an economic boom created a massive migration in the past few years from India’s congested trains to planes that revolutionised travel in the country of 1.1 billion people. But that shift is losing pace.

With fares costlier, domestic air passenger traffic climbed just 8.7 percent in April from a year earlier — the slowest rate in four years — as travellers switched back to trains and cars or opted not to travel.

Short-haul routes have been particularly hard hit as people turn to cheaper transport. Passenger growth now is far slower than the annual 25 percent expansion the government forecast until the end of the decade.

“Before, you might have flown to your cousin’s wedding. Now you think twice,” said a senior airline official who asked not to be named. “We’re getting just 50 percent occupancy on some routes when it should be 80 percent or more.”

India has five main carriers including the biggest domestic carrier Jet Airways, Kingfisher and state-run Air India along with a clutch of smaller airlines.

“We should see these things (consolidation and route rationalisation) start happening by July, August when the (Indian) offpeak season starts,” said Kaul. “But the next 12 to 18 months will be very hostile.”

The industry has already seen some consolidation in the past couple of years, with the mergers of state-owned carriers Indian and Air India and acquisitions of budget Air Sahara by Jet and low-cost Deccan by Kingfisher.

Even before crude skyrocketed, India’s airlines were reeling from cut-throat competition and aviation turbine fuel (ATF) prices that were the world’s costliest due to local taxes of up to 30 percent.

But the industry may have reached a “tipping point” with last month’s 18.5 percent hike in jet fuel prices by state oil firms, said Kaul.

With the global oil price surging, airlines have hiked their fuel ticket surcharge five times during the past five months. Even with the fare increases, jet fuel now accounts for nearly 50 percent of operating costs, industry officials say.

The sector’s problems have been aggravated by poor airport infrastructure and shortage of qualified staff.

“We’ve had a systemic problem with profitability in the industry,” Kaul said.

Carriers, battling to survive, are seeking a ceasefire in fare competition.

“Airlines are speaking to each other to end the policy of low-priced tickets that’s making everyone bleed,” said Jet chief executive Wolfgang Prock-Schaeur. But “raising fares means a problem in filling up planes,” he noted.

The Congress-led government is worried about the fate of the sector, whose expansion it had trumpeted as one of its big achievements.

Its “growth story is now at crossroads. It is a matter of time before this dynamic sector becomes unhealthy,” Aviation Minister Praful Patel warned last week as he pushed for a government emergency package to support the industry.

In the short-term, the sector’s problems could mean deferment of purchases of 25 to 30 aircraft this year, mainly in the narrow-bodied segment, Kaul said.

But he’s upbeat longer term. “Even with a slowdown, market dynamics will remain dynamic. Post 2010, we expect a better situation in terms of a more friendly cost structure, lower taxes, a better regulatory environment, better infrastructure,” he said.

“But there’s no magic wand right now except for making sure you’ve got sound management to pilot you through this,” said Kaul.

Via Economic Times

The Chinese aviation authority has initiated talks with the Indian directorate general of civil aviation (DGCA) in an attempt to make a foray into the Indian aviation market, for the type-certification of their turbo-prop aircraft to be sold to interested Indian parties.

A DGCA delegation is expected to visit China soon to study the aircraft`s technical and other capabilities. Indian carriers and the turbo-prop MA-60 aircraft displayed during the annual summit of the International Air Transport Association (IATA) has reportedly evinced keen interest because of their good performance and profits inducing capacity. However, no details regarding the airlines or Indian companies interested in acquiring the planes have been divulged yet.

The Indian market has expressed its requirement for a very large number of turbo-prop aircraft to meet its regional air traffic needs and the MA-60 is expected to meet the Indian market demands as the Indian route structure is similar to that of China.

Via MyIris

A senior Indian government officials says there would be strong interest among Indians to visit Fiji if flights were more convenient, the on-line news service Fiji Live reports.

Kailash Shrivastava, Joint Secretary in the India Ministry of Civil Aviation, says there biggest barrier to tourism is having to fly from India through Singapore, and then through Australia or New Zealand before traveling to Fiji.

“This is very time consuming. So, the necessity for us would be to first see that proper facilities are provided for the public at large to fly to destinations in Fiji,” Shrivastava said.

“I can tell you that because of this liberalization which governments of Malaysia, Thailand and the government of Singapore have done, today you will that in all these countries and important cities, any number of Indian tourists have been flocking there almost every day,” he added.

Via Pacific

Cars slow down and families pose for pictures at the new multi-ring flyover outside the massive steel and glass structure that is Bangalore’s new international airport.

The $625m airport has become the latest attraction in town, a swanky new facility created in a joint venture involving Siemens Project Ventures, Larsen and Toubro, Unique Zurich Airport, the Karnataka State Government and the Airports Authority of India.

Compared with the old Hindustan Aeronautics (HAL) airport, which was built to handle just 2.5 million passengers but was handling close to 10 million, it is a giant leap ahead - and one that is urgently required.

India has the fastest-growing number of passengers in the world with a number of budget airlines entering the market and bringing air fares down.

The country’s airports handled more than 90 million passengers in 2006 compared with 68 million the previous year.

To keep up with the growing number of passengers, newer airports are being built all across the country.

Large capacity

The Bengaluru International Airport is among the many projects that the government has outlined to improve the country’s poor infrastructure.

The Civil Aviation Ministry has set a target of having 500 operational airports in the next 12 years.

This will include expanding existing airports, redeveloping unused airports and building brand new airports.

Billed as a solution to the chaos, the new airport in Bangalore is spread over 4,000 acres and can handle some 2,500 passengers an hour.

As you walk in through the doors, there are no X-ray machines to screen the bags.

Instead passengers can walk straight to the check-in counters to get their boarding cards.

After the security there are food plazas, shopping centres and even a bar.

Long journeys

But casual visitors are not allowed inside the airport, largely because of security fears.

Soon after it opened, many families could be seen standing outside the glass walls peering inside.

But even though the airport boasts of world-class facilities the passengers are not happy.

Many complain because it is tricky to get to the airport; travelling from the city to Devanahalli on the outskirts of Bangalore will take at least 45 minutes and could take a couple of hours, depending on where in the city you are driving from.

From Electronic City, where most of the information technology companies are based, it took one passenger, SriLatha Kumar, three-and-half hours to drive here.

Frustrated at the long commute, she said her flight to Mumbai would take less than 90 minutes, which meant getting to the airport made up the bulk of her journey.

Early birds

It is a familiar problem in Bangalore.

The city is often brought to a standstill by traffic jams that can last for hours.

While the airport is up and running, the planned infrastructure to connect it to the city is still a few years away.

Meanwhile, the uncertain traffic picture means some passengers become so worried about arriving too late that they arrive very early instead.

Rajeev Raghunathan, an engineer from a software firm in London, reached the airport six hours before his flight, only to find it was delayed by two hours.

After having spent the better part of his day in the airport he was impressed with the facilities but was regretting taking a short-haul flight.

“I have wasted a whole day of work,” he says.

“I simply couldn’t miss my flight so I decided to come to the airport early.

It cost him 650 rupees ($16; £8) to get to the airport in a cab, compared with less than a third that price to the old airport.

“It’s a fantastic airport- really world class - but I wish it would be easier to get here,” he says.

Teething problems

Bangalore’s citizens have bemoaned the overstretched HAL airport’s facilities for years.

By offering this world-class facility, the city had hoped to boost its economy.

As a thriving IT centre Bangalore is flooded with multinational companies - and their employees, who are frequently flying in and out of the city, welcome the airport’s arrival.

Yet teething problems, with long delays, have upset many during the early period after its opening.

“I have begun to hate flying anywhere,” bleats IT worker Shailesh Kumar, 34, who flies at least three times a week on business.

“I have to leave my home hours ahead to make sure I make it through the city’s jammed roads and once I reach here I just pray that I make it to my flight in time.”

But others make good use of their time at the airport, heading for the shops.

SK Pal, who was travelling to Mumbai, couldn’t find his boarding gate as there had been no announcement made.

While upset that his flight was delayed, he said: “Everyone is saying how international this airport looks - they have spent a lot of money on it. I wish they would train the staff a little more in making clear announcements.

“But these are just teething problems. I’m sure it’ll get much better.”

Via BBC News

Air fares may be burning a hole in your pocket, but airline Companies are nonetheless trying hard to cut down their operating costs. Come June 1 and all airlines in India will introduce electronic tickets (e-tickets) after IATA’s (International Air Transport Association) enforcement to do away with paper tickets. Industry experts say that airlines will save on stationary cost by converting the four-coupon paper ticket into a 100% e-ticket. Of the 7-8 million international tickets, which are issued from India, close to 1.5 million are paper tickets. But in domestic travel, about 95% of tickets issued are e-tickets and 5% are paper.

All low-cost airlines in India are e-ticket-enabled. Jet Airways and Kingfisher are e-ticket enabled. “In case of an interline arrangement with international carriers for foreign travel, Indian carriers issue a four-coupon paper ticket if the partner airline is not e-ticket-enabled,” said CV Prasad, president, Travel Agents Association of India, adding that Air India still has 5% paper tickets on its network. Says Jitendra Bhargava, director (PR) Air India, “We will introduce 100% e-tickets from May 31. Our interline agreements between carriers have been made e-ticket-enabled.” He adds that they have informed the travel agents associations about the transformation.

However, an aviation analyst explains, “Globally, the penetration of e-tickets is 95% in Europe, 88% in the Middle East, 87% in Africa, and 97% in North Asia. The transition from paper tickets to e-tickets will mean savings on stationary cost for the airline. The cost of issuing a paper ticket is anything between $8-$10 compared to $1-$2 to process an e-ticket for any airline.”

Travel agents across the country have sought government intervention to defer the enforcement of implementing 100% e-ticketing in India. Their prime concern is that e-tickets cannot exceed 16 segments and it would be difficult for airlines to make payments to each other in case of interline arrangements, specifically with airlines, which are not 100% e-ticket enabled. Bhargav adds that it could be a rare case wherein a traveller wants to travel to more then 16 segments at one go. Albert Tjoeng, communications manager, Asia Pacific, IATA said, “In the case of e-tickets, which cannot exceed 16 segments, airlines can issue a multi-purpose document (MPD).”

Via Financial Express

The more luggage you carry, the more expensive your air ticket could be. Jet Airways has indicated that passengers may be charged extra for their check-in luggage to make up for spiralling fuel prices. Jet’s move comes in the wake of the mighty American Airlines announcing its plan to levy a $15 fee on the first piece of checked-in baggage and $25 on the second piece.

“I’m not overruling fuel prices going up further and every airline has to look at its bottom line and adopt some measures,” said Naresh Goyal, chairman, Jet Airways at the Berlin Air Show on Tuesday. “We have not yet decided on how fares will increase, but they will increase and every airline will have to do so too.”

Goyal added that Jet Airways will explore every solution to check losses accruing from the rise in fuel price. He said the Indian airline industry stood to lose up to $2 billion in 2008. The price of crude oil reached a record $133.82 a barrel last week, forcing airlines to make deep cuts in order to stay in the business. Until now, Indian carriers responded to fuel price hikes by increasing the fuel surcharge component on the air ticket.

American said that taxing baggage was not something new but a policy already followed by several US airlines. Its chief executive said that escalating fuel costs would force it to pare down on flights, cut thousands of jobs and charge passengers extra for baggage. The airline has however decided not to levy this charge on its elite frequent flyers.

At the show where German Chancellor Angela Merkel was present, Goyal took delivery of an Airbus A330-200 aircraft, sending out signs that cost cuts would not affect the purchase of new aircraft, with Jet spreading its wings to Hong Kong and expanding services to Europe and the Middle East.

These are troubling times for the airline business, what with fuel spikes, a weak US economy and plateauing European markets. However, for India, this show was a significant event because this is the first time that it has participated at any air show in the world. Leading the Indian delegation was defence minister A K Antony, who was accompanied by defence secretary (production) Pradeep Kumar and close to 30 senior Indian Air Force (IAF) officers.

Antony is here to hold a meeting with his German counterpart Dr Franz Josef Jung. Around 25 Indian companies including HAL and organisations such as Indian Space Research Organisation, Defence Research & Development Organisation and India’s aerospace association SIATI have organised displays.

Via TOI

Silk Air, a 100 percent subsidiary of Singapore Airlines, has kept their options ‘wide open’ to set up new connectivity in non-metros, a top official said. “We will continue to work on basis of requirement as and when opportunities come” Singapore Airlines General Manager-India Foo Chai Woo told reporters Tuesday on the sidelines of a function where they launched new services for disabled people in Chennai.

“As of now there is nothing specific yet, but we will continue to evaluate our year round operations” he said to a query whether there is new connectivity in the offing.

The company which runs chartered trips to destinations like Jaipur, Varanasi, has also planned to increase its presence in these areas.

“Our subsidiary Silk Air operates chartered trips across several months on various locations and we have planned to strengthen it to places like Varanasi, Jaipur, Budh Gaya and Pune” Foo said.

Referring to the services offered to the disabled people from Singapore Airlines, Foo said “an escort, right from the Airport to board a plane will be present with an disabled person”.

“We will also provide a special lounge access for them while they wait for the boarding announcements”, Foo said. These disabled persons will also receive priority baggage tags to cut down their waiting time.

Via Chennai Online

Cleartrip has a launched a new service - Cleartrip Videos, where you can take a pick from about 1,000 travel videos covering 36 cities across India. These videos were submitted by amateur, but keen film makers during the Short Flicks Festival sponsored by Cleartrip last year.

One to three minutes long, these videos (un)cover everything from monuments and traditional sightseeing hubs to hidden facets of a city. So expect to see not only the Taj Mahal and the Gateway of India but also discover the oldest mithai shop in Delhi, find out where to get the best chhola kulcha in Amritsar, watch monks play football in Darjeeling and see a temple dedicated to the god of mistakes in Baroda.

The videos are easy to use - one can easily search by destination, popularity or tag.

Jet Airways, India’s premier international airline will commence its daily services from Mumbai to San Francisco via Shanghai, effective June 14, 2008. Jet Airways will thus become the first Indian carrier to operate daily non-stop flights to Shanghai from Mumbai and onward to San Francisco.

Jet Airways will become the first private Indian airline to connect the financial heart of India, Mumbai with “Everybody’s Favorite City,” San Francisco. With the famed Silicon Valley to its south – the heart of America’s technology revolution has a large concentration of Indian IT professionals who have made an invaluable contribution towards Indo-American cooperation in high technology areas.

Jet Airways’ launch of these new flights will connect the economic and commercial hubs of Mumbai, Shanghai and San Francisco. With the growing importance of trade and commerce between India & China and the strong presence of both the Chinese and Indian communities in San Francisco area, Jet Airways’ will cater to large volumes of business and leisure travel between these cities. Jet Airways’ flights to San Francisco via Shanghai will offer its passengers the advantage of reduced regular flying time, benefiting the business traveler

Jet Airways will operate these transpacific flights with the airline’s brand new Boeing 777-300ER aircraft which will offer unprecedented levels of luxury, privacy and comfort in the air, including First Class suites with the world’s longest airline beds, private closets, dining tables for two, and 23″ flat-screens. Première (business) class seats offer what are considered the most comfortable Business Class seats in the sky that convert to 73″-long totally flat beds. Leg-room in Economy is more generous than the norm - and passengers in all three classes have access to the state-of-the-art Panasonic eX2 entertainment system, complete with 200+ movies, games and endless music choices.

Jet Airways’ flight to San Francisco International Airport will also be the airline’s fourth daily departure from India to North America, following new launches of service from New York’s JFK and Newark airports, and Toronto Pearson International Airport, within the past year. San Francisco is a popular tourist and business destination and with the commencement of these new flights Jet Airways expects the route to prove one of its most popular sectors.

Announcing the launch of these new flights, Mr. Sudheer Raghavan, Chief Commercial Officer, Jet Airways, said, “With the introduction of Jet Airways’ new transpacific service to San Francisco via Shanghai, we continue our airline’s unprecedented expansion throughout North America. This bares testimony to our team’s accomplishments of launching four new long-haul routes in less than a year to North America. This takes forward, Jet Airways Chairman’s, Naresh Goyal’s vision that’s by 2010, the airline should be rated among the top five airlines in the world. Having changed the way people fly in India, we are now taking to the world our very own brand of service and style.”

Deccan has announced its Summer Special Bonanza for online bookings through its website. The Deccan website is an important ticketing window and guests booking tickets online can look forward to receiving more value on their Deccan ticket.

Nalin Gagrani Head Marketing Deccan said “Deccan offers not only great connectivity and fares but also attractive value adds at every touch point including our website. We are focused on leveraging our website for stimulating air travel. The present holiday season is a busy travel period and our online promotion will give our guests yet another reason to fly with us.”

About the Summer Special Bonanza
There are exclusive 2 nights/ 3 day holiday package to be won in the offer period. The holiday package will be all paid for and can be availed between 1st July 2008 and 30th September 2008. Terms and Conditions will apply.

All ticket bookings (PNR) on Deccan will receive gift voucher worth Rs 250 and a saving of Rs 99/- per passenger per ticket. The offer is valid for bookings made within 22nd May 2008 and 10th June 2008 and for travel in the same period. The offer can be availed only on bookings made on the Deccan website (www.airdeccan.net).