A must read financial and operational analysis of IndiGo

by Devesh Agarwal

John Samuel Raja and Binoy Prabhakar of The Economic Times (ET) have done a fine forensic analysis on the financial reports of InterGlobe, the parent of IndiGo airlines.

We at Bangalore Aviation strongly recommend you read this article and compliment the authors on their fine work.

Read more »

Video: Interglobe's new A320 flight simulator training centre near New Delhi

by Devesh Agarwal

Late last month we reported on the Interglobe-CAE joint venture simulator training centre near New Delhi. Here is a video promotion of the same facility.


With a hat-tip to @neelammathews

Read more »

IndiGo confusing passengers on 'Seat Plus Premium Seat'

by Devesh Agarwal

What are the best seats for tall or wide passengers on IndiGo flights? Read on to learn.

Two weeks ago, as I was making a booking on IndiGo for a flight to Delhi, I was offered a chance to buy 'Premium Seats' under the airline's Seat Plus value add-on plan for Rs. 500 per seat per flight. Premium seats include all seats in row 1 (which is against the bulkhead), and rows 12 and 13 (the emergency exit rows), and the windows and aisle seats in rows 2 and 3.

On its website IndiGo advertises these "premium seats" as offering "extra leg room", reinforced with a graphic. As a frequent traveller, I was fairly certain that this information was inaccurate.

IndiGo's description of Seat Plus Premium Seating on November 19, 2013.

To the best of my knowledge IndiGo does not offer any additional leg room on rows 2 and 3, since it keeps the same seat pitch of 30 inches for all its rows, with the exception of the two emergency exit rows 12 and 13. But, may be the airline had made some recent changes?

To dispel my doubts I contacted the call centre, and after many holds of "a few minutes" the agent was unable to say one way or the other. Even the airline's spokespersons were unable to clarify the doubts when I contacted them.

On November 22, when I flew the airline's newest A320 VT-IFV from Bangalore to Mumbai, I confirmed there is no additional or extra legroom in rows 2 and 3.

Seat plus description page on December 3, 2013

So one must ask why is IndiGo indulging in such practices? Someone at the airline over-zealous to get more value added revenue? One could take it as misleading advertising, and over-selling a feature that does not exist.

On December 3rd, As I web-checked-in for my flight, I decided to look-up the 'Seat Plus' information page, again.

Lo and behold, there is no change in the page even though I had pointed out to IndiGo the misleading information on their site two weeks ago.

So this clarification and warning to all the tall people looking for extra leg-room. Stick with rows 12 and 13. Even row 1 may not offer you the leg-room you desire. For the extra wide bodies (XWBs) like me, do not choose rows 12 and 13. IndiGo uses non-standard shorter seat-belts, and cabin crew are prohibited by regulations from giving you an extension seat-belt if you are seated in an emergency exit row.

I invited IndiGo to comment on this story, but there is no response from the airline till the publishing time. 

Do you think IndiGo is misleading its customers? Share your thoughts on this via a comment.

Read more »

InterGlobe and CAE inaugurate India’s largest pilot training facility

by Devesh Agarwal

Rahul Bhatia, InterGlobe, Marc Parent, CAE

InterGlobe Enterprises, the parent company of India’s largest domestic airline, IndiGo, and CAE, a global leader in flight simulators and training, inaugurated India’s largest pilot training facility in India. Located in Greater Noida, in the National Capital Region (NCR), the Centre, CAE Simulation Training Private Limited (CSTPL), is a joint venture between InterGlobe Enterprises and CAE with an initial investment of $25 million.

The Centre starts with two CAE Series 5000 A320 full-flight simulators certified level D, and has the capacity to expand to six simulators. The facility provides "wet" and "dry" type-rating, recurrent, conversion and jet indoctrination training for commercial aircraft pilots of IndiGo, and will commence training, GoAir’s A320 pilots from December. CSTPL will also be the first centre in India to impart Airbus certified training, and can train up to 5,000 pilots per year.

CSTPL is the fourth aviation training location that CAE operates in India. CAE already trains more than 1,500 crew members every year at its training centre in Bengaluru, the first independent training centre in India and the first to earn approval as a fixed-wing Type Rating Training Organisation (TRTO). CAE also operates a joint venture helicopter training centre in Bengaluru and in partnership with the Government of India, CAE operates ab-initio flight schools in Gondia and Rae Bareli, located in the parliamentary constituencies of former civi aviation minister Praful Patel, and India's first political dynasty, the Gandhis.

India is expected to be the fourth largest aviation market in the world, with a large demand for narrow-body pilots. IndiGo and GoAir have placed orders for 180 and 72 A320 family aircraft respectively. IndiGo already has 71 A320-232 aircraft in its fleet from an original order for 100 A320s.

The country's other two major carriers, Air India and Jet Airways have their own in-house training facilities.
 

Read more »

IndiGo adds Bagdogra as a destination. New Ahmedabad Mumbai Guwahati flight.

by Devesh Agarwal

India's largest domestic airline is adding Bagdogra as its 30th domestic destination from December 1, 2013.

With its 71st A320 joining the fleet, IndiGo will operate 448 daily flights to 30 domestic and five international destinations.

Flight 6E-434 commences an almost 12 hour duty cycle at 05:45 starting at Ahmedabad to Mumbai to Guwahati to Bagdogra to Kolkata to Bangalore. In reverse flight 6E-433 starts at 11:05 in Bangalore and ends at 23:20 at Ahmedabad.

Thus, the new schedule sees introduction of new daily non-stop flights to Bagdogra from Guwahati and Kolkata. Bagdogra will also be connected to Mumbai via Guwahati, and to Bangalore via Kolkata.

IndiGo will also launch a seventh daily non-stop flight between Delhi and Kolkata and also a daily non-stop flight between Mumbai and Guwahati, offering a same plane one-stop service from Ahmedabad to Guwahati. It is not clear if a passenger can take a two-stop same plane service from Ahmedabad to Bagdogra.

Aditya Ghosh, President, IndiGo said,

“We are extremely pleased about adding Bagdogra as our 35th destination of operations as it is a landmark moment for us. Bagdogra is going to be an important part of our destination network because it holds good prospect for commercial business apart from the region of Darjeeling, Siliguri and New Jalpaiguri. We are committed to providing maximum connectivity from Bagdogra on our network by catering to various segments and we are confident that these additional services will prove immensely popular with our passengers. We are planning to increase the connectivity to and from Bagdogra and expand our operations with additional flights. It is our constant endeavour to provide more flexibility of choice for our customers as IndiGo continues to offer them on time, hassle free and always affordable flying experience.”

Read more »

SpiceJet posts record Rs. 559 crore loss in Q2 FY2014. Needs urgent capital infusion.

by Devesh Agarwal

Gurgaon based low fare carrier SpiceJet Ltd., continued the record of disastrous performance in the Indian airline industry when it announced a record Rs. 559 crore loss for the second quarter, ended September 30, of the fiscal year 2013~2014.

This compared to the Rs. 163.5 crore loss from the same quarter last fiscal, and a Rs. 50.5 crore profit from the first quarter of this fiscal.

On October 23, India's largest private carrier Jet Airways reported a monstrous loss of almost Rs. 1,000 crore.

The airline blamed the poor performance on the precipitous drop in the exchange of the Indian Rupee vs the US Dollar which occurred in the quarter and contributed Rs. 42 crore to losses. In a statement released late this evening, it said

“The civil aviation sector in India continues to struggle under the burden of several adversities mainly the Indian rupee that saw unprecedented weakness during the quarter,”

Poor demand due to a slowing economy saw a drop in income to Rs. 1,257.22 crore from Rs. 1,701.543 crore in the first quarter, though marginally better from Rs. 1,185.244 crore from the same quarter last fiscal. A 9% growth in number of passengers out-stripped the 17% increase in capacity measured in available seat kilometres (ASK), resulting in a 7% in average passenger yields from Rs. 4,001 to Rs. 3,711. Desperate sales at cut-throat fares have also taken their toll.

A lack of capacity discipline by virtually every Indian carrier, especially domestic leader IndiGo, and Jet Airways, continues to exasperate the soft demand situation, and we see the same indiscriminate financial indiscipline as we did in 2008.

Expenses shot up to Rs. 1,791.623 crore against Rs. 1,641.933 in the first quarter, and Rs. 1,357.305 crore from the same quarter last fiscal. Aircraft maintenance costs shot up almost 64% from Rs. 199 crore to Rs. 325 crore largely driven by Rs. 78 crores in engine maintenance expenses due to a bunching up of shop visits.

Fuel costs fell from 45% of total expenses to 39.7% but thanks to the plunge in income, increased from 43.8% to 57% of income.

Continuing losses have put the airline in a precarious financial position. It is estimated the airline requires a minimum Rs. 1,500 crore capital infusion. While the airline has announced the appointment of Sanjiv Kapoor, the former chief executive of GMG Airlines of Bangladesh, as its Chief Operating Officer, it still lacks a Chief Executive, since the departure of Neil Mills, nearly three months ago.

The silver lining for SpiceJet is that parts of the third quarter and the fourth quarter sees high air travel due to the festival season and returning Indian travel.


The supply-demand imbalance is heading for a precipice with expected the commencement of new airlines AirAsia India, and Tata-SIA.

Share your thoughts via a comment.

Read more »

Dubai International’s passenger traffic up 13.1 per cent in September

By BA Staff

Courtesy of Wikipedia

Passenger traffic at Dubai International, the world’s second busiest airport for international passengers, rose 13.1 per cent in September, according to the latest traffic statistics issued yesterday by operator Dubai Airports.

Passenger traffic in September totaled 5,407,326, an increase of 13.1 per cent compared to 4,780,394 during the corresponding month in 2012. Year to date traffic is up 16 per cent to 49,379,165 compared to 42,565,340 recorded during the first nine months of 2012. Aircraft movements totaled 30,746 during September, an increase of 10.2 per cent from the 27,909 recorded during the same period last year. Passengers per aircraft movement in September came in at 193.

All regions recorded positive growth in September with the exception of South America (-6.9 per cent).  Among the strongest markets in terms of percentage* passenger growth were Eastern Europe (+65.1 per cent), driven by flydubai expansion to multiple destinations in the region and Emirates’ new service to Warsaw. Passenger traffic to and from Australasia rose 38.6 per cent as a result of Emirates' expansion and Qantas’ new operation connecting Australia and London through Dubai. On a country level, Australia (+41.7 per cent), France (+23.7 per cent), Saudi Arabia (+22.4 per cent), Thailand (+21.8 per cent) and the UK (+21.7 per cent) saw the largest increases.

In terms of overall passenger numbers, Western Europe traffic took over as the top market thanks to robust growth (+14.8 per cent) during the month. AGCC came in second thanks to 15 per cent year-on-year passenger traffic growth. The Indian subcontinent, which took third spot, continued to show positive growth (+9.8 per cent) due to the expansion of several Indian carriers including Indigo, Spice Jet and Air India Express.

Air freight volumes rose 1.8 per cent in September with volumes of 196,823 tonnes compared to 193,261 recorded during the same period last year. Year-to-date cargo traffic totalled 1,785,539 tonnes, up 6.6 per cent from the 1,674,997 tonnes shipped during the same period last year.

Paul Griffiths, CEO of Dubai Airports said:

“Passenger and cargo traffic growth continue unabated and Dubai International is on track to eclipse our projections for 65.4 million passengers and 2.7 million tonnes of cargo. With the opening of our new passenger terminal at Al Maktoum International at Dubai World Central, and the ongoing expansion at Dubai International, Dubai’s aviation infrastructure continues to make it an attractive destination for tourism, trade and commerce.”

Read more »

Singapore Airline's passengers suffer consequences of IndiGo accident

by Devesh Agarwal

Its Friday, the 13th, and many a frequent flyer will sympathise with the bad-luck of the passengers on Singapore Airlines flight SQ503 from Bangalore to Singapore earlier this morning.

The inbound flight SQ502 from Singapore scheduled to arrive at Bangalore around 10pm, was diverted to Chennai due to the runway closure at Bengaluru International Airport following the accident of IndiGo airline flight 6E-125 around 8pm last night.

The in-bound passengers waited and finally the runway at Bangalore was opened around 11pm. SQ502 finally arrived in Bangalore around 2am early this morning.

The return flight SQ503, left around 3am, about four hours behind schedule. The crew realised that they would exceed their Flight Duty Time Limit (FDTL). Hurried parleys were made with headquarters, and a decision was taken to divert to Bangkok. In the mean time, a stand-by crew was flown from Singapore to Bangkok to crew SQ503 back to Singapore.

The aircraft was on the ground in Bangkok for less than a hour, and SQ503 finally arrived in Singapore at 1pm, seven hours behind schedule.

Image courtesy Google maps.

All I can do is shake my head and sympathise with the passengers, but at the same time, give credit to the crew for thinking up of a solution.

If they had continued even to Kuala Lumpur, they would be in breach of the regulations.

Had they stayed back in Bangalore, the earliest a replacement crew could come would be on the morning SilkAir flight. This would mean the SQ503 flight would reach Singapore only around 5:30pm, and connections to the US west coast would be missed.

Already the existing delay meant that the morning connections to the United States, Asia, and Australia were missed. The Bangkok diversion allow the airline to try and make up some of the connections in the evening. However, considering this is the weekend, the airline staff in Singapore has their work cut out for them.

What are your thoughts? Share your frequent flyer gaffs via a comment.

Read more »

Kingfisher lawsuit against IAE shows Vijay Mallya's desperation

by Vinay Bhaskara and Devesh Agarwal

Earlier this month, defunct Indian carrier Kingfisher Airlines, which has been grounded since 20th October, 2012 when the Indian regulator, the Directorate General of Civil Aviation (DGCA) suspended its flying license, filed its annual report for fiscal year 2012-2013.

Instead of focusing on finding a way to pay off the nearly Rs. 7,000 Crore debt the airline owes to a consortium of lenders led by the State Bank of India, Kingfisher used the annual report as a mouthpiece to announce a lawsuit filed in the City Civil Court at Bangalore against engine manufacturer International Aero Engines (IAE) for $235 million (damages of $210.4 million plus $24.6 million in punitive damages), claiming that the IAE V-2500 A5 engines used to power Kingfisher’s once 32-strong fleet of Airbus A320 family aircraft were “inherently defective, both in design and manufacture.” The Kingfisher annual report says.

United Breweries (Holdings) Limited has filed a suit in the City Civil Court at Bangalore against International Aero Engines AG, its shareholders / joint venture partners and your Company being O.S. No. 6406 of 2012, alleging that the IAE V-2500 A5 engines supplied to your Company were inherently defective, both in design and manufacture, and has claimed damages of USD 210,400,000 plus Rs. 1,621,000,000 (aggregating to approximately $24.557 million as per the current exchange rate of approx Rs. 66  per US Dollar) and has reserved liability to claim further damages. No relief is sought against your Company in the said suit.

This lawsuit smacks of desperation on the part of Kingfisher and its management, as the carrier continues to flounder.

Considering that it did not operate for most of the year, if Kingfisher still managed to find enough cash to pay CEO Sanjay Aggarwal US $591,000 in an annual salary, clearly demonstrates a carefully managed business strategy will allow the airline to slowly pay off debt without resorting to doomed strategies such as this lawsuit.

Kingfisher restart would be a strategic mistake

Kingfisher also continues to pursue the flawed idea that the carrier should “restart” operations with up to 20 aircraft, or that the carrier will make back the money by selling itself to an investor. This is a mistake. Re-launching operations in today’s Indian airline industry would be a tragic mistake. For starters, the Indian macroeconomic picture is very poor; the Indian Rupee has continued to decline and growth projections for the fiscal year have slipped beneath 5%. This has driven demand for Kingfisher’s premium style product lower than when Kingfisher shut down, and that too up against a somewhat re-vitalized Air India, a re-capitalized Jet Airways, a market leading IndiGo, and a soon to arrive behemoth AirAsia India. 

Moreover, India’s other airlines have committed to firm orders of at least 93 current generation narrow body aircraft, as well as 272 next-generation re-engined products (which doesn’t even include an expected re-engined order from low cost carrier (LCC) SpiceJet. This doesn’t even include the fleet of well-capitalized startup AirAsia India, who we project to grow to a fleet of between 10 and 12 Airbus A320s, and regional startup Air Costa, who is supposedly on the verge of launching operations within the next two months. And all of these orders and startups have locked Indian carriers into domestic capacity growth, even with the persistent demand weakness. LCCs have been flooding major Metro markets with capacity (see IndiGo driving out Jet Airways with a massive capacity dump in the Bhubaneswar market as just one prime example).

Even at the peak of the Indian market, Kingfisher as an airline was not profitable and the one part of their network which was profitable, the regional ATR network in the South, has been co-opted by LCC SpiceJet using a fleet of Bombardier Dash 8 Q400 turboprops. SpiceJet already has 15 Q400s in its fleet, and is working to secure financing to grow the fleet by another 15 frames. For example, one of Kingfisher’s most profitable routes pre-shutdown was the trunk route between Bangalore and the industrial Karnataka city of Hubli, but Hubli is now a SpiceJet monopoly with service to five destinations using the Q400s. And Air Costa is due to start operations, muddying up the waters with even more capacity.

One cannot blame Kingfisher’s investors for the idea that if only Kingfisher were to be re-started and/or sold, they will make back their money over time. This sort of playbook is present all over the global airline industry, most notably with US LCC Virgin America whose investors have continued to swallow persistent losses over the past six years in hopes of making their money back via an initial public offering. This would be a mistake in the Indian market, where the existing carriers are already struggling. SpiceJet, Jet Airways, and Air India have all hiked their fares by more than 25% in recent days to offset the rise in the Rupee, with GoAir and IndiGo expected to follow suit soon. Kingfisher re-launching into this environment would just be a recipe for racking up thousands of crores more, in further accumulated losses.

It is better to leave Kingfisher's aircraft rotting on tarmacs across the country where they could at least serve as a reminder to Dr. Mallya, how he, and his incompetent mis-managers, drove a great airline concept in to tatters.

Read more »

Bangalore airport shut down as IndiGo flight veers off runway

by Devesh Agarwal

IndiGo Airbus A320 VT-IGV at Bengaluru International Airport. Photo copyright Vedant Agarwal. Used with permission.

At approximately 20:10 (14:40Z), an IndiGo Airbus A320-232 registration VT-IGV performing flight 6E-125 from New Delhi to Bangalore, with 110 passengers and six crew (two pilots, four cabin crew), veered off the runway 27 while attempting to land at Bengaluru International Airport (BIA) during heavy rains and cross-winds.

The aircraft damaged five runway lights and suffered burst tyres, finally stopping near taxiway Foxtrot, and blocking the sole runway 09/27. There were no injuries.

All flight operations at the airport were suspended till repairs to the aircraft were carried out and it was towed to the apron. Flight operations resumed almost three hours later at 22:55 (17:25Z).

A number of flights both domestic and international were diverted to neighbouring airports like Chennai.

The airline released this statement

IndiGo flight 6E–125 from Delhi to Bengaluru, while landing on runway 27 at the Bengaluru airport at 20:10 pm, landed to the right of the center line, while experiencing heavy rains upon landing. The aircraft veered to the right and contacted 5 runway edge lights which led to deflation of the right main tyres. The aircraft was controlled and was taxied off the runway onto taxi track ‘’Foxtrot” and stopped.

All 110 passengers and six crew on board are safe with no injuries reported and have been de-planed safely from the aircraft to the terminal.

As per the operating procedure, the aircraft will be grounded for maintenance work. The matter has been reported to the DGCA and the safety department of IndiGo and DGCA will inquire further into the matter at the earliest.

At IndiGo, we are committed to passenger comfort, and safety is our highest priority. Hence, there can be absolutely no compromise on safety.

In April 2009, in a very similar incident, a Kingfisher Airlines Airbus A320-232 VT-KFT also veered off runway 27 in heavy rain and winds, and damaged runway lights. (Read that story here). At that time the runway was shut for less than 55 minutes. A shut down of three hours with the aircraft stopping on the taxiway suggests significantly more damage to the aircraft than IndiGo is claiming.

Read more »

Analysis: Jet Airways to withdraw from Bhubaneswar

by Vinay Bhaskara

According to several reports, Mumbai-based full service carrier Jet Airways is planning on pulling out from Bhubaneswar from the Winter 2013/14 season. Inventory has been zeroed out from 27th October onwards and flights to and from Bhubaneswar are no longer bookable on jetairways.com. Additionally, sources are saying that Jet Airways has not requested slots at Bhubaneswar for this winter, though we will have to wait for the release of route information onto the Global Distribution System (GDS) to confirm this news.

During August, Jet Airways has operated three flights per day to Bhubaneswar, daily Chennai-Bangalore-Bhubaneswar and return, daily Mumbai-Bhubaneswar and return, and daily Kolkata-Bhubaneswar and return. Mumbai-Bhubaneswar and Kolkata-Bhubaneswar are served with JetKonnect Boeing 737-800 equipment, while Bangalore-Bhubaneswar is served with full service 737-800 equipment. The current service level actually marks a reduction from planned levels at the start of the summer, as an additional two flights per day to Kolkata were initially filed with the Directorate General of Civil Aviation (DGCA) utilizing ATR 72-500 turboprop equipment.

If true, the cancellation of Bhubaneswar is a poor step on the part of Jet Airways. One of the few strengths remaining for the financially struggling Jet Airways is its powerful domestic network, with 49 domestic destinations. Bhubaneswar is the 18th busiest airport in India, and one of the most important destinations in Eastern India. However, Jet Airways has been facing challenges thanks to the steady growth of low cost carrier (LCC) IndiGo in the Bhubaneswar market. IndiGo is the largest carrier in the Bhubaneswar market, with nine flights per day this summer to five nonstop destinations; Delhi, Hyderabad, Kolkata, Mumbai, and Vizag.

Even with the increased LCC competition, it does not make sense that Jet did not at least keep around Mumbai-Bhubaneswar for feed purposes. With the new Mumbai integrated terminal arriving by the end of next year, Jet Airways has the opportunity to build a strong regional hub at Mumbai connecting passengers domestic to international and vice-versa. Since Mumbai-Bhubaneswar is served with JetKonnect equipment, with lower operating costs, it is likely losing the least money of Jet's Bhubaneswar services, and thus it would have made sense for Jet to keep Bhubaneswar around.

But the cancellation is just the latest a growing pattern of poor network decisions made by Jet Airways over the past few years. It is certainly possible for airlines to cut services on their way to profitability; but that usually applies to redundant or heavily money-losing capacity that does not serve a strategic purpose (Delhi-Milan being one rare example at Jet Airways); not a key short haul destination. 

Read more »

IndiGo adds Ranchi as its 34th destination

Indian budget carrier IndiGo, has announced the introduction of new daily flights to Ranchi from Delhi and Patna. The airline will service the three cities in a circular routing i.e. Delhi-Patna-Ranchi-Delhi and reverse from today.

Flight No.	Origin	Destination	Departure	Arrival	Frequency	Via	Fare*	Effective
6E 493	Delhi	Ranchi	4:20 PM	6:10 PM	Daily		4011	18-Aug-13
6E 494	Delhi	Ranchi	6:50 AM	9:40 AM	Daily	Patna	4011	18-Aug-13
6E 494	Ranchi	Delhi	10:10 AM	11:55 AM	Daily		3848	18-Aug-13
6E 493	Ranchi	Delhi	6:40 PM	9:40 PM	Daily	Patna	3848	18-Aug-13
6E 493	Delhi	Patna	4:20 PM	7:30 PM	Daily	Ranchi	3066	18-Aug-13
6E 494	Patna	Delhi	8:55 AM	11:55 AM	Daily	Ranchi	2903	18-Aug-13
6E 493	Ranchi	Patna	6:40 PM	7:30 PM	Daily		1679	18-Aug-13
6E 494	Patna	Ranchi	8:55 AM	9:40 AM	Daily		1679	18-Aug-13

Read more »

Opinion: Air India pilots should not resort to scare tactics

by Devesh Agarwal

The Indian Commercial Pilots Association (ICPA) of the erstwhile Indian Airlines, who fly the narrow body A320 family fleet of national carrier Air India is resorting to scare tactics accusing the airline "of arbitrarily changing the flight operating procedures for narrow-body A320 aircraft, affecting flight safety."

The issue revolves around the carrier's decision to reduce the acceleration altitude to 800 feet AGL (above ground level).

Bangalore Aviation readers will recall our report last month on German carrier Lufthansa reducing its take-off acceleration altitude, as a method to save fuel and reduce harmful emissions.

Immediately after take off, an aircraft usually ascends at a constant speed with the flaps extended until it reaches a certain altitude. In an effort to preserve engines, and since most modern aircraft generally do not require the maximum thrust available, a reduced level of take-off thrust is used. When the aircraft reaches a certain initial target altitude, the engines thrust is reduced, flaps retracted, and then the aircraft is switched to climb thrust. Soon after that the aircraft starts speeding up. The altitude at which the speed increase begins is called the acceleration altitude. This is also when the aircraft commences entering a "clean configuration" which is flaps up, etc. - a configuration it will fly in.

In India, IndiGo was one of the first airlines to work on reducing the acceleration altitude. Initially it was driven by safety as a counter measure to avoid bird strikes, so common around Indian airports. The Airbus A320 typically maintains an angle of 15 degrees when it takes-off, till it reaches the clean configuration. This high nose-up attitude prevents forward visibility and thus prevents the pilots from taking any corrective action in case of bird activity. An additional benefit was fuel savings. The airline worked closely with aircraft manufacturer Airbus, and today the airline commences flap retraction at 500 feet AGL and enters a clean configuration before 1,000 feet. The two Boeing 737 operators in India, Jet Airways and SpiceJet too maintain an acceleration altitude of 800 feet AGL.

The flap with the pilots appears to be, that a Regional Director issued the norms instead of a senior person like a Director Flight Operations, or a Director Training and it is altogether possible the egos of these pilots are bruised. On the flip side, I acknowledge that proper procedure and protocol should be followed, but my issue is the public scare tactics the pilots are resorting to. It hurts the image of an airline, and it hurts the image of the pilots themselves, who are already perceived as a pampered and selfish lot. Today's companies are teams and employee loyalty is a critical component to their very survival.

Air India is making a change that is already being practised by its fellow airlines, and one that will save it money.

I, for one, would expect to see the pilots of the ICPA support such proven cost saving initiatives.

Do feel free to post your comment in agreement or disagreement. I would like to hear from other pilots, especially A320 pilots. Just request to keep the comment clean and civil. We do have the young generation reading this site.

Read more »

Vested interests shaping government policy helped AirAsia partner Tatas too

by Devesh Agarwal

Image courtesy Wikipedia

Aviation insiders have known for many years what AirAsia boss Tony Fernandes dared publicly state the day before yesterday, after his meeting with civil aviation minister Ajit Singh. Vested interests have shaped, nay, distorted Indian civil aviation policy.

One of the more shameful rules of Indian civil aviation is the policy of allowing Indian carriers to operate international flights only after they have been in operation for five years, and have a fleet of at least 20 aircraft.

The worst aspect of this rule is that it applies only to Indian carriers. So while even newly formed airlines from our neighbours like Mihin Lanka, flyDubai, etc., could fly to India, a perfectly capable IndiGo or SpiceJet were forced to watch their competitors establish themselves, while they themselves had to sit idly by. Even today GoAir is unable to operate international flights since its fleet is smaller than the mandated 20 aircraft, forcing the airline to lobby and seek an exemption from the rule.

Image © Devesh Agarwal. All rights reserved.

The blind ambition to operate international flights before it completed the five year requirement, was one of the driving reasons for Vijay Mallya promoted Kingfisher Airline's disastrous acquisition of the loss-laden Air Deccan, which is now acknowledged as a major reason for the ultimate demise of the liquor baron's airline.

We completely agree with Fernandes that this bizarre rule has held back Indian airlines while other airlines in the region have formed and grown to become large stable businesses, thus causing a loss to the nation.

Fernandes appeared to confirm insider information when he used the name "Naresh", most likely referring to Naresh Goyal, the politically super-connected boss of Jet Airways, who was the "vested interest" behind this bizarre policy decision.

Fernandes though, should remember history and use caution when blaming "vested interests" for distorting government policy. Back in 2006, his partners in AirAsia India, the Tatas, actively lobbied the finance departing to apply a different yard-stick from the then national auto policy, and made their fledgling Indica car qualify as a "small car" and obtain lower excise duty benefits which it was otherwise not be entitled to, while its competitors would.

A 2006 report explains

While the Auto Policy defines a small car as being up to 3.8-metre long and the 6-digit excise notification in the official tariff book places a cap of 1,000 cc on the engine capacity for a car to qualify as 'small', the Budget made cars up to 4 metre in length and having an engine capacity of 1,200 cc (petrol) and 1500 cc (diesel) eligible for the lower, 16% excise slab.

This means, had the finance minister stuck to the existing definition, petrol models such as Hyundai Santro and Maruti WagonR would not have become eligible for lower excise. Under this definition, the upcoming diesel variants of Swift and Getz will also become eligible for lower excise since the engine capacity cap for diesel versions has been placed at 1,500 cc. But, just a few weeks after the budget was passed, two major automobile companies have begun lobbying for extending these concessions further.

Officials confirmed that two companies, including the Ratan Tata-led Tata Motors, have sought further relaxation.

Fernandes' outburst is understandably,  also vested. After all, he is responsible to the shareholders of his business for delivering results. One way for his new venture AirAsia India to quickly grow, would be to operate internationally.

Today AirAsia cannot carry passengers all the way from south east Asia to the middle-east on its narrow body A320s, since the distance it too great. At the same time. some of the routes would not have enough traffic to fill the wide-body A330s of AirAsia X. But if AirAsia India flies overseas, it can be fed by its sisters AirAsia, and Thai AirAsia who would bring passengers to the Indian hubs and transfer them on their Indian sister along with Indian passengers for the onward journey to the middle-east.

Is this a case of the pot calling the kettle black? Or is Tony Fernandes genuinely interested in universal change to fair play rules? Share your thoughts via a comment.

Read more »

IndiGo modifies its seat pricing after ministry rap

by Devesh Agarwal

Photo copyright Devesh Agarwal. All rights reserved.

A chastened IndiGo airline, hurried modified portions of its much annoying seat pricing policy after facing the irritation of passengers and the rap of the civil aviation ministry.

A late night statement from the airline says

The feedback of our flyers is of utmost importance to us and as a result, with immediate effect, IndiGo will not charge for pre-booking of any of its middle seats (except for rows 1, 12 and 13)

About 11 days ago, the airline had announced a new seat pricing formula called IndiGo Seat Plus, after the aviation ministry had indicated their acceptance of un-bundling of additional services like baggage, food, seat pre-selection, etc, which helps drive ancillary revenue, a major income source for airlines.

Under IndiGo Seat Plus, passengers could pre-block seats for a premium. Rs 500 for sitting in Rows 1, 2, 12 and 13 on domestic flights and Rs 800 for international. For all other window and aisle seats the premium was Rs 200 and Rs. 300 for domestic and international flights respectively. However, what got the goat of almost everyone was IndiGo's Rs. 100 and Rs. 200 charge for booking of even the most unwanted seat in the aircraft, the middle seat.

Earlier today, reports indicated The Ministry of Civil Aviation has directed domestic airlines to limit the number of seats on their flights for which they charge passengers a fee which is over and above the cost of the ticket. Since IndiGo was the only airline charging for seats, quiet clearly it was in the cross-hairs of the officials.

Indian carriers would be well advised to take heed of the developments in the North American market, where airlines nickel and dime their passengers every step of the way. Last year, US airlines earned in excess of $6 billion (about Rs. 33,000 crores) in change fees alone. Change fees are normally charged for changing ticketed schedules.

Read more »

Three-way analysis: How does Emirates respond to Jetihad?

By Oussama Salah, Vinay Bhaskara, and Devesh Agarwal

Photo copyright Devesh Agarwal

The Indian government often makes curious decisions in setting aviation policy. For example, it encouraged Air India to lower prices to gain market share, causing mayhem in the market place and increasing Air India’s losses. It also recently  allowed Air Asia to expand in India by approving a JV with the Tata and Bhatia group, creating an LCC that will put pressure on indigenous carriers like SpiceJet and IndiGo. The latest example is the quadrupling in the number of seats between India and Abu Dhabi due to the recently concluded UAE-India bilateral air services agreement which will mostly benefit the newly formed Jetihad partnership.

A recent Bangalore Aviation analysis of International Traffic Share in and out of India, showed Jet Airways share at 16.01%, Emirates at 13.04% and Etihad at 1.95%. In one fell swoop, Etihad has not only caught up with Emirates, but has effectively almost doubled its total seat capacity because its strategic partner Jet Airways will have access to almost the same number of seats from the Indian side of the bi-lateral agreement. This is visible with the newest route being launched by Jet Airways - Kochi-Abu Dhabi-Kuwait.

The Indian market is important to the Gulf carriers as it is an important source of demand to MENA (Middle East and North Africa) , Europe, and North America. In particular, the North American market is being developed by these carriers at a rapid pace, and new routes such as Qatar Airways’ upcoming services to Philadelphia are heavily dependent on feed from the Indian subcontinent. The latest India/UAE bilateral almost doubles the weekly seat allocation for Jetihad to Abu Dhabi.

Dubai has unofficially asked for a doubling of the weekly seat allocation to Dubai and the rights to serve additional Indian metros but officially requested an increase from 54,200 to 72,400 seats per week.

The problem is that Dubai and Emirates airline in particular are in the cross-hairs of the Comptroller and Auditor General (CAG) of India which has criticised the civil aviation ministry for granting excessive rights to the airline during the tenure of Praful Patel as minister. Emirates is facing the "Devil's Alternative". The spotlight is shining bright on it, however, with India accounting for 11% of Emirates huge global capacity, the airline cannot just let Etihad-Jet Airways (Jetihad) just gobble seat capacity.

Elections are looming next year, some very skilful and smart "lobbying" will have to be done.

Another tactic will be similar to Jetihad. Emirates can opt for to invest in one of the remaining India carriers, IndiGo, SpiceJet, or GoAir, in hopes of gaining additional capacity. It is doubtful the promoters of IndiGo who have access to large sums of cash will accept acquisition, GoAir has indicated its willingness, but is too small within India and does not have any international operations yet. SpiceJet is the wild card. Are the Marans ready to dilute or even exit the airline business with their Maxis and Astro business relations under investigation? Emirates is hesitant to invest in foreign airlines after its poor experience with Sri Lankan Airlines, but will the airline have to bite the bullet to keep its India dominance alive?

Another option is for Emirates to code share with one of the large domestic players like Indigo or SpiceJet in order to increase its Indian feed and encourage them to operate additional flights to Dubai. Emirates currently code share on Jet Airways flights from Mumbai and Delhi to Dubai. Flydubai flies only to three destinations Hyderabad, Ahmedabad and Lucknow and would like to increase its Indian presence (which is less than 2% of its capacity). It is capable of serving smaller secondary airports thanks to its fleet of narrowbody 737-800s, and could provide additional feed for Emirates’ super-hub in Dubai. While flyDubai and Emirates are technically separate entities, both are owned and operated by the government of Dubai and increased integration of the route networks is possible.

But code sharing is a short term solution. Ultimately, the real fix has to be driven through the India-UAE bilateral. Emirates needs the increased capacity for itself and flydubai. Emirates can leverage Dubai’s position as a global business hub and destination for Indians to ask for increased services. Indians are the top expatriate investors in Dubai property (9 Billion AED) and the UAE is the second largest trading partner of India with billions of dollars in reciprocal investments. With almost two (2) million NRIs (non resident Indians) living in the UAE, many affluent, the UAE has a solid basis to ask for increased seat capacity in the next round of bilateral talks. However, it would need to find a powerful Indian advocate to help in its cause. Jetihad was able to secure such a large growth in bilateral capacity to Abu Dhabi in large part thanks to the political influence of Jet Airways head Naresh Goyal. It remains to be seen whether Emirates can find a similarly connected individual to help advance its interests, and by extension those of flydubai and even Air Arabia.

Regardless, with the current state of flux in Indian Aviation, Emirates will not stand still in response to Jetihad, expect something to happen, and soon.

Oussama Salah, who blogs at “Oussama’s Take”, is an aviation geek and aviation professional with 35 years of experience in the Mena/GCC airline industry. He is a regular contributor to Bangalore Aviation with his insightful and knowledgeable comments.

Read more »

INFOGRAPHIC: Airline-wise share of international passenger traffic, to and from India, 2011 to 2012

Based on a report in The Economic Times we have prepared this infographic showing the airlines' market share of international passenger traffic to and from India during fiscal 2011~2012.

The chart throws up some surprises. SriLankan Airlines and Oman Air feature on this list, but Singapore Airlines does not. Hard to accept? and where is AirAsia? Share your thoughts via a comment.

Read more »

Analysis: Strong first quarter for Etihad bodes well for Jetihad deal

by Vinay Bhaskara

Abu Dhabi based full service carrier Etihad Airways reported record results for the first quarter of 2013.
Revenues grew a whopping 18.7% year over year to $900 million, up from $758 million in Q1 of 2012. In its 10th year of operations, Etihad also saw cargo revenues grow 17% to $193 million. Passenger figures also reached a new high of 2.8 million, growing 13% year over year from 2.3 million. Average seat factors grew 4 percentage points over 2012 to 80.5% despite a 12.5% increase in capacity. See the table at the bottom of the story for a full overview of key metrics for Etihad’s first quarter.

Said Eithad President and Chief Executive Officer James Hogan, “Our Q1 2013 results have again outstripped global trends, with our strongest ever first quarter results for passenger revenue… This performance demonstrates that Etihad Airways’ strategy of organic growth, wide-ranging partnerships, and strategic equity investments is delivering for us and our partners.”

More importantly for a future “Jetihad” partnership and equity investment, Etihad’s existing equity stakes are beginning to pay handsome dividends, with revenues growing 34% from $136 million to $182 million, and accounting for 20% of Etihad’s overall revenues.

The success of Etihad’s existing equity investments in airberlin, Air Seychelles, Virgin Australia, and Aer Lingus, who all reported profits in the first quarter of 2013 bodes well for a potential equity investment in Jet Airways because it shows that such an investment is viable.

However, the current macroeconomic pressures in India do give some pause. Demand growth continues to slow, with domestic demand falling 9% year over year in February. This, to some degree reduces the value of Jet Airways, and Naresh Goyal and other Jet Airways decision-makers will need to realize this and adjust their expectations accordingly.  Some of the valuation figures of Jet Airways at over a billion US dollars are unrealistic and out of line with the current strength of the industry and the Indian investment environment as a whole. That being said, the Indian Diaspora and international demand remain relatively robust, and thus Jet does offer significant value to Etihad as an Indian partner.

Jet Airways could sorely use the additional capital in order to solidify its restructuring efforts at a time of flux in the industry. Air India continues to flounder (and indeed a recapitalized Jet could win away some of Air India’s passengers), and Kingfisher is dead. SpiceJet appears to have found a pair of winner in its regional network of international destinations and fleet of Q400 turboprops serving Tier II/III destinations - while GoAir continues to fly under the radar as a presumably profitable airline. IndiGo meanwhile, is still humming along, though it has begun to rethink its growth strategy and must continue to do so. AirAsia’s new venture threatens to usurp the delicate balance of power that has emerged in the domestic industry, though much is yet to be determined.

We will learn a lot from the first quarter results of SpiceJet and Jet Airways. The domestic results in particular will indicate if the shrinking of demand has been made up for with increased fares on aggregate (a sign of a healthier industry). Regardless, a Jetihad deal is slowly getting closer and closer to fruition.

Etihad Key Metrics: First Quarter 2013

Key indicators	Q1 2013	Q1 2012	Variance
Passenger revenue	US$ 900 million	US$ 758.1 million	+19 per cent
Cargo revenue	US$ 193.1 million	US$ 165.4 million	+ 17 per cent
Total revenue	US$ 1,136.5 million	US$ 989 million	+ 15 per cent
Passengers	2,767,789	2,340,356	+ 18 per cent
Revenue passenger kilometres (RPKs)	12.9 billion	10.9 billion	+ 17 per cent
Available seat kilometres (ASKs)	15.9 billion	14.3 billion	+ 12 per cent
Seat factor	80.5 per cent	76.5 per cent	+ 4 points
Aircraft	73	66	+ 7

Read more »

IndiGo continues to expand domestic operations

by Vinay Bhaskara

As its fleet grows with the introduction of new Airbus A320s, including India’s first sharklet retrofitted A320, low cost carrier (LCC) IndiGo continues to expand its domestic services. The carrier will be adding one additional daily flight to Jaipur, Nagpur, and Kolkata from its hub in Mumbai with schedules as follow:

Mumbai – Jaipur
6E296 BOM – JAI -- 1120 – 1300 – 320 -- Daily
6E295 JAI - BOM -- 1330 – 1515 – 320 -- Daily

Mumbai – Kolkata
6E327 BOM – CCU -- 1725 – 2000 – 320 -- Daily
6E328 CCU – BOM -- 2030 – 2335 – 320 -- Daily

Mumbai – Nagpur
6E403 BOM – NAG -- 1540 – 1705 – 320 -- Daily
6E412 NAG - BOM -- 0910 – 1035 – 320 – Daily

The new flights will all begin March 20th.

IndiGo continues to saturate the routes between major Indian metros, lacking other avenues of expansion given that runways at Tier II and III Indian airports are largely unable to handle the A320, nor do those markets have the demand to support 180 seat jets.

This lends credence to the idea that IndiGo will explore new avenues of expansion in the form of a regional airline operating turboprops. Furthermore, its existing operations, especially the longer distance ones, will become more profitable as the fuel burn savings are accrued from the continuous introduction of Sharklets equipped A320 aircraft.

Read more »

IndiGo launches new domestic and international flights

IndiGo cabin crew.Photo courtesy IndiGo.

With the addition of its 64th new Airbus A320, India largest domestic carrier, IndiGo, has launched eight new flights on its domestic network.

• The fifth daily and direct flight between Delhi and Chennai,
• The second daily and direct flight between Delhi and Kochi
• The fourth daily and direct flight between Mumbai and Chennai
• The fourth daily and direct flight between Mumbai and Kolkata

On the international front, IndiGo launched

• The first daily and direct flight between Thiruvananthapuram and Dubai, 
• The second daily and direct flight between Mumbai and Dubai,
• Shifted its Delhi Singapore flight to Chennai Singapore.

This takes IndiGo's flight tally to 399 flights to 33 destinations

Read more »