Mumbai: The domestic airline industry is emerging as a lucrative option for foreign and local financial investors.

On the inaugural day of the first-ever Investor Summit for India and Middle East organised by the Centre of Asia Pacific Aviation (CAPA) in Mumbai, this was the common sentiment that emerged from the conclave. Kapil Kaul, chief executive officer, Indian sub continent and Middle East, CAPA, said: Two years ago, investors were not even considering looking at Indian aviation, in the last two years, not only Indian entrepreneurs have turned serious about aviation business, but investors are seriously exploring the market for right investments. According to Kaul, in 25 years, almost $50billion worth of investments is expected in the Indian aviation industry. Till 2004, India had only 190 aircraft and now the number is expected to touch 450-500 by 2010, now it may be even more post the Indian bookings at the Paris Air show. Athar Shahab, director- business development, IDFC, said their company, which has been tracking the transportation sector in the country, was keenly watching the developments of the airline industry. Shahab pointed out airline companies should tap the local market for loans giving the rising rupee.

India liberalizes aviation sector -PTI NEW DELHI: Opening of the skies to foreign and private domestic airlines and liberalization of the entire aviation sector in the country will mark the New Year, as the government worked through 2003 to unveil a revolutionary Civil Aviation Policy next month to enhance competition and make flying easier and cheaper. These major initiatives were watershed developments in Indias aviation history this year when the world celebrated the centenary of man taking to the sky. Even as a high-level Committee appointed by the Civil Aviation Ministry submitted a roadmap for the aviation sector for the next decade, the government this month decided to allow private domestic carriers to fly to SAARC countries, including Pakistan, and give freer access to airlines from SAARC and the ASEAN nations to Indian destinations. India and Pakistan also decided to resume from January bilateral aviation links, which were snapped following the terrorist attack on Parliament on December 13, 2001. The path-breaking offer to the airlines of the ASEAN nations to fly into four Indian metros and 18 major tourist destinations without any restriction was made by Prime Minister Atal Bihari Vajpayee at the India-ASEAN summit in Bali, Indonesia. During the year, the Ministry saw Shahnawaz Hussain passing on the mantle to Rajiv Pratap Rudy, though in the process the Civil Aviation portfolio was

downgraded from the Cabinet rank to the Minister of State status. There was not much forward movement on the implementation of the governments budget promise of starting work on privatizing and modernizing the airports at Mumbai and Delhi. In fact, after short-listing three bidders for the job of financial consultant to oversee the privatization process, an empowered Group of Minister (GoM) decided to go in for a re-bid. The year that passed by also did not see much progress in the fleet acquisition programs of Indian Airlines (IA) and Air India (AI). While the domestic carriers plans to acquire 43 aircraft at a cost of over Rs 100 billion went through two meetings of pre-Public Investment Board, Air India Board was yet to submit its proposal to the government to buy 28 planes at a cost of Rs 105.89 billion. The only positive note on the fleet expansion front was the induction of four turboprop 50-seater ATR-42-320 aircraft for IA subsidiary Alliance Airs operations in the northeast, with an annual financial assistance of Rs 350 million from Department of Development of the Northeast Region

Pak PM sets terms to allow Indian private airlines

London: Pakistan Prime Minister Shaukat Aziz has said that he was ready to allow Indian private airlines fly into his country, but it would happen only after New Delhi gives satisfactory reply to his three suggestions namely - opening of banks in each other's country, increase of air flights and Srinagar-Muzaffarabad bus service, and the gas pipeline project. Aziz said that he expected to elicit New Delhi's response on the above three suggestions, which he had also mentioned during his last visit to India, when he meets his Indian counterpart Dr Manmohan Singh during the SAARC Summit in Dhaka next month. According to The News, Aziz said this in Davos where he has gone to attend the World Economic Forum. Speaking at a breakfast meeting with international media, he said that his government was keen to resolve all the outstanding issues with India in tandem with the question of Jammu and Kashmir.
- Jan 31, 2005

India, US renew their agreements on aviation sector

by Priscilla Huff

(Go To Top)

Washington: India and US have renewed their agreements in the aviation sector, giving a boost to the trade relationship between the two countries. Civil Aviation Minister Praful Patel signed the updated agreements with US Transportation Secretary Norman Mineta in Washington DC. "And so the time has come where we must renew this agreement according to the needs of the hour, and as you rightly pointed out, it would be the relationship between the United States and India, growing stronger and stronger with the trade and commerce and tourism increasing by a great degree between these two countries. It is but natural that we have a new agreement on air transport at the earliest," Patel said. India and the US have been using an agreement on aviation relations that dates back to 1956. Currently, about two million people travel between the United States and India each year. Much of that traffic and business goes to third parties, such as European or Middle Eastern carriers. Mineta said that an "open sky" agreement would enable the two countries to expand cargo services. "And I would welcome seeing non-stop service commenced between our two countries. Now, while air cargo between the United States and India is also experiencing strong growth, an "open skies" agreement would enable an even greater expansion of cargo services. Above all, we need to create the conditions to allow our airlines to provide consumers with more options and better prices," he said. The US has an "open skies" agreements with 66 countries, having inked about a dozen of them during the Bush administration. The US "open skies" agreements permit unrestricted service by the airlines from each nation, without restriction on destinations, schedule, or prices. "Open skies" agreements are intended towards making business in the aviation sector much easier. However, several US carriers are in serious economic trouble, with some analysts predicting US Airways to go out of business, even as Delta, United and American struggle with a price war and labour costs. Patel said more investment in the aviation sector would bring more business for both the countries. "We do appreciate the fact that aviation infrastructure will be the engine for growth for aviation in India. And with this large investment in aviation expected in the years to come, it would be the fitness of things where the United States and India can work closely in a variety of areas," he said. Patel said that aviation investment had been a top priority of the new Congress-led government. "India's aviation investment in terms of aircraft acquisition would be of a very high proportion because, we have in the recent past, opened up the sector for private players also. It has been unshackled, it has been very highly restricted until just a few months ago," he said. Patel also discussed with Mineta how many airports in India are already preparing for major renovations and predicted that Indian carriers would be purchasing 200-250 planes, probably part of it from US manufacturer Boeing in the next three to five years. Meanwhile, Mineta called for more revenue opportunities for the American airlines. "Well, I wouldn't characterize it as banging down our doors but when you look at the financial condition of our airlines, they are looking for increased revenue opportunities. And not only are revenue opportunities more attractive in the international marketplace, the margins in terms of what they make from their international operations is much

greater than from their domestic," said Mineta. Under the new agreement there will be no restrictions on the frequency, destinations and aircraft, carriers can fly. At present, only Air India flies direct flights to and from New York and Chicago. -Jan 14, 2005

In 1953, a new dream took shape - to airlink the vast South Asian subcontinent by a single, modern and efficient airline. The airline was Indian Airlines. Today, Indian Airlines, together with its fully owned subsidiary Alliance Air, is one of the largest regional airline systems in Asia with a fleet of 62 aircraft(4 wide bodied Airbus A300s, 41 fly-by-wire Airbus A320s, 11 Boeing 737s, 2 Dornier D-228 aircraft and 4 ATR-42). Indian Airlines has been setting the standards for civil aviation in India since its inception in 1953. It has many firsts to its credit, including introduction of the widebodied A300 aircraft on the domestic network, the fly-by-wire A320,Domestic Shuttle Service, Walk-in Flights and Flexi-fares. Its unique orange and white logo emblazoned on the tails of all its aircraft is perhaps the most widely recognised Indian brand symbol that has over the years become synonymous with service, efficiency and reliability.

The airlines network spans from Kuwait in the west to Singapore in the East and covers 75 destinations - 57 within India and 20 abroad. The Indian Airlines international network covers Kuwait, Oman, UAE, Qatar and Bahrain in West Asia, Thailand, Singapore, Yangon and Malaysia in South East Asia and Pakistan, Nepal, Bangladesh, Myanmar, Sri Lanka and Maldives in the South Asian sub-continent.

Indian Airlines is presently fully owned by the Government of India and has a total staff strength of around 18562 employees. Its annual turnover, together with that of its subsidiary Alliance Air, is well over Rs.4000 crores (around US$ 1 billion). Indian Airlines flight operations centre around its four main hubs- the main metro

cities of Delhi,Mumbai,Calcutta and Chennai. Together with its subsidiary Alliance Air,Indian Airlines carries a total of over 7.5 million passengers annually.

On Wednesday, a fleet of five Hyundai Getz cars will make their way from a dealer in suburban
Mumbai to the refurbished environs of the Rs 4,000 crore (Rs 40 billion) Nusli Wadia group's flagship company Bombay Dyeing in central Worli district. It will be a rally with a difference. The cars will drive in single file, painted in bright turquoise blue and displaying a gigantic white logo reading "Go". No, it will not be a cavalcade of dignitaries. The cars are for the top rung of the soon-to-belaunched upstart airline Go Air which is temporarily housed on those premises. And taking charge will be the younger Wadia scion Jeh Wadia, managing director of Go Air. By then, he will have returned from the Paris Air Show currently underway. He will also have parked his current fleet of Ferrari, Mercedes Benz, Cadillac and Range Rover cars in the garage. Aviation experts believe that Wadia is in Paris to network and tap investors. Whatever it is, for the moment he is obsessed with the job at hand -- Go Air, positioned as India's lowest-cost airline, is scheduled to take off in October. At 31, Wadia may be the youngest airline chieftain, but his ambitions are nothing short of soaring. That's because the Go Air aviation project is perhaps the Wadia group's most ambitious endeavour. "It is also the first project undertaken by the third generation of Wadias," says a consultant. Current projections are that Go Air will take off with a fleet of three 180-seater used A-320 aircraft. The strategy is to go in for a combination of leased and owned planes. Wadia claims that they will have 20 leased planes beginning in the second year, at least some of which will include Boeing 737-800 aircraft. "The first of our new aircraft will come in from 2008," claims Wadia, who is in Paris to talk with both Boeing and Airbus. Click here to find the LOWEST airfares But, should Go Air take delivery of new aircraft some time in 2007, then the number of leased aircraft could come down to 10, he says. At the time of going to press, with other Indian carriers making news for having placed record orders at the Paris Air Show, there's still no news from the Wadia camp on its negotiations with the manufacturers, though announcements are expected soon. Unlike Vijay Mallya's Kingfisher Airlines which has tied up with national carrier Indian Airlines for an engineering, hangar and ground services contract for an alleged Rs 1 crore (Rs 10 million) per aircraft, Wadia says that there are no tie-ups being considered. For a low-cost airline, maintenance accounts for 19 per cent of its expenses.

However, a ground handling agent claims that Go Air has shortlisted four partners for outsourcing for ground services and the final decision is pending. "These are both agents as well as airlines like Jet, Sahara and Indian Airlines," he adds. Go Air's flight schedule is believed to initially touch second-tier destinations that will include Baroda, Ahmedabad, Goa, Nagpur, Indore, Jammu, Srinagar and Hyderabad. "There are plans to keep the aircraft for a minimum of eight to 10 hours in the air," reveals an aviation expert. But why an airline? Is it part of the herd mentality currently embracing India Inc? "Not at all. I wrote the summary report way back in 2000. I am a prudent financial investor and the objective is to improve shareholder value," says Wadia. Still, he is loath to divulge figures, dismissing it as competitive strategy. "We are not taking money from any of our group companies. It is the Wadia family money," he says. "We will have a no-frills airline with a focus on driving down costs and fares. We will offer quality consistency, quality assurance and a time-efficient product," he reiterates. "The Wadias have enough affluent friends abroad they could borrow from. Also, many overseas venture capitalist are waiting to invest in Indian aviation," says the head of a new airline. And like most of the other Indian airlines, Go Air is also wooing a foreign crew. "Where is the talent here?" asks Wadia puffing on his Marlboro. Not too many people are buying that. They claim that his core team is not yet in place. Wadia refutes it, claiming that apart from Graham Williamson who is the chief executive officer imported from SkyServices, and general manager engineering Cheong Cheng Lock Lucky from Singapore Airlines, he has already hired a chief pilot, director of information technology, director of sales and marketing and head of flight operations, many of whom are serving their notice periods. Wadia says his managerial crew, including pilots, would be a mix of Indians and expats. This puts pressure on Go Air as a low-cost airline -- salaries account for 12 per cent of a low-cost airline's costs. With expats on board, costs go up further since they have to be paid in dollars, say consultants. Airport services is another issue -- such as the turnaround time (the time taken to get people from the lounge into the plane). For Jet Airways, the turnaround time today is 45 minutes. For Air Deccan, it is 30 minutes for a 180-seater Airbus and 15 minutes for a 48-seater ATR. "Go Air will have to be really fast on the ground," says a competitor. Also, most low-cost carriers started with second-hand ground service equipment like coaches and push back tractors. Coaches, which transport passengers from the terminal to the plane, account for 15 per cent of the costs as a new coach is priced between Rs 35-45 lakh (Rs 3.5-4.5 million). Knowing Wadia's background, will he opt for used equipment? "Nothing is finalised," say his people. At the moment, Wadia shares floor space with elder brother, Bombay Dyeing's deputing managing director Ness Wadia before he moves closer to the airport in two months.

The Go Air terminal is sizzling with activity. Until a few months ago, he was only the deputy managing director of the Rs 146 crore (Rs 1.46 billion) Bombay Burmah, a group company. Now, juggling his responsibility with Go Air, a couple of months ago Wadia traded his plush office on another floor for a spartan space amongst his employees. His glass-encased see-through cabin, although large, is more like a mini-conference room. "I want to be with my people as I hate the hierarchy approach," he says fiddling with his laptop. So, facing him in the adjoining cabin is the silver-haired Williamson. Wadia claims that his current aviation dreams grew out of the angst of being born with a silver spoon. Yes, he lived every boy's dream of chasing anything "with speed and adventure" even as existential questions plagued him. All trappings of wealth were more than welcome, but every indulgence was awash with guilt. Every time he spoke to his parents about it, they said he was "truly fortunate". "Yes, it was a contradiction and I couldn't live with it myself. That's when I realised I had to do something about it," says Wadia. Compounding the anguish was the Rashtriya Swayamsevak Sangh stalwart Nanaji Deshmukh, who has been a close Wadia family friend for decades. Deshmukh, a champion of the self-reliance movement for the underprivileged residing in Chitrakoot in Madhya Pradesh, where he runs the Deendayal Research Institute, has been a great influence on the Wadia boys. According to family friends, Deshmukh visits the Wadia household almost every month and is believed to have told Nusli Wadia: "You have two sons, so why don't you give me one of them for Chitrakoot?" "At 26, I realised that while I was seeking responses to my questions, the answer was always in front of me. That's when I joined Nanaji and got involved in social work at Chitrakoot," says Wadia. That was five years ago. With no domestic air connectivity, going to Chitrakoot meant flying from Mumbai to Delhi and Allahabad, and then taking a car. Initially, like all rich boys, Wadia's Chitrakoot visits involved hiring a private jet "which cost me a bomb". The entire journey by train was anything from 16-26 hours. So he decided to travel, at least part of the journey, like the common man. "Even an air-conditioned seat didn't guarantee the basic facilities. The conditions were pathetic. That's when I decided that I'd make a difference to their lives by having a low-cost airline, offering train fares for flying," claims Wadia, tracing the genesis that marked the conception of Go Air. Wadia's career had begun with the late nineties dot-com boom, when he was put in charge of the group's IT initiatives. It involved developing businesses in IT education, building bandwidth, content and cross border venture deals, all fuelling his social conscience. All of that was way ahead of its time. But with the dot-com bloodbath in early 2000, Nusli Wadia advised his son to pull out. That's when Go Air happened.

The aviation industry dismisses Wadia as a novice. "Aviation is a serious business and not a rich boy's dream to own a plane finally coming true," says a well-placed Indian Airlines pilot. Already, many low-cost airlines have been launched. And Kingfisher Airline, which had also made noises about being low-cost, is now being touted as a full-service carrier. Wadia claims he is not worried. "We will be the lowest-fare airline in India," he says. That's why he is going all out to ensure that his take-off is well on schedule.

The 'good' life

Is Jeh Wadia a bad boy turned good? At one time, like most rich industrialists' sons, he was a familiar face on page 3. Wadia says that he was a heavy drinker and partied like crazy. A severe bout of jaundice a few years ago saw him give up liquor completely. Ex-Bombay Dyeing managers say that Wadia at that time was so impatient that many of the workers on the shopfloor were at the receiving end of his brusqueness. The Wadia boys were initiated into the business through the Bombay Dyeing shopfloor. But his loyalists -- and there are plenty of them -- defend him. "You lie to him and there is nobody worse than Jeh," says a manager. By Wadia's own admission, he is very short tempered and, like all young boys, "had his wild days." Sent to England to study at Richmond College, a pocket money of 600 was 'not sufficient for partying.' So Wadia took up a summer job at a car dealership. "I changed cars every day when I went to college, impressing everyone around me," he says. Dropping out of college in the third year, the facade continued till he came back to India. Born with the gift of the gab, Wadia displayed a business streak that the family hadn't unearthed. "Coming into contact with so many people, the dealership gave me a different outlook on life. I understood different values from the money perspective. It was the turning point in my life," he says. Back in India, he set up a car dealer agency -- PNS Motors -- and imported cars. While the money from this fuelled his wild passions, he was made a management trainee in Bombay Dyeing with a Rs 2,000 monthly salary to "learn the ropes from ground zero". Despite the education, operations was not his forte. "I had cotton coming out of my ears and I hated it," he says. Now he wants to replace that with turbine fuel.

The low-cost airline cost structure

Having a low-cost airline may be the flavour of the season, but the cost structure is completely different compared to a full-service airline. A. Fuel B. Maintenance

C. Airport charge D. Capital cost E. Salaries F. Marketing and distribution G. Interest H. Insurance I. Other

About Us Our Vision The Kingfisher Airlines family will consistently deliver a safe, value-based and enjoyable travel experience to all our guests. Our Values Safety This is our overriding value. In our line of business, there is no compromise. Service We are all in the hospitality business; we must always seek to serve our guests and gain their trust, goodwill and loyalty. Happiness We seek to build an organisation with people who choose to be happy, and will endeavour to influence our guests and co-workers to be happy too. Teamwork We will succeed or fail as a team. Each one of us must respect our colleagues regardless of their rank, and we must work together to ensure our mutual success. Accountability Each one of us will be held accountable for the successful execution of our duties, commitments and obligations, and we will strive to lead by example.

SpiceJets mission is to become Indias preferred low-cost airline, delivering the lowest air fares with the highest consumer value, to price sensitive consumers. We hope to fulfill everyones dream of flying! With India's economic and business growth, the percentage of traveling population is burgeoning. More and more Indians are traveling for both business and pleasure and everyone needs to save both time and money. SpiceJet's vision is to answer that need, to ensure that flying is no longer only for CEOs and business travelers, but for everyone.

The power to fly for everyone SpiceJet is a low fare airline that will not treat passengers as sheep. With a dynamic fare structure, SpiceJet will not only offer limited seats at Red Hot Fares, but even its Everyday Spicy Fares, available up to the day of travel, will be well below industry standards. With contemporary interiors, modern graphics and vibrant colours, SpiceJet is very much like todays traveler - practical yet stylish. A SpiceJetter will feel this is the smart, international way to travel, I've made the smart choice. SpiceJet is committed to make sure you feel good at the end of a flight, arriving at your destination uncrumpled and ready for anything. The power of technology SpiceJet's new generation fleet of aircraft is backed by cutting edge technology and infrastructure to ensure the highest standards in operating efficiency. With maintenance support by KLM and state of the art technology from world leaders like Star Navigation, Russel Adams and Tech Log there will be no compromise on safety, reliability or on-time travel. The company has tied up with Navitaire the worlds renowned low-cost support for reservations and revenue management. E-booking and e-ticketing facilities are available online along with tele-booking. The power of performance. From aircraft to crew and ground staff the focus is on performance. Each SpiceJet employee is groomed to be smart, friendly, efficient and well-informed, ensuring that any interaction will make you feel welcome and looked after. Experienced pilots, well-trained cabin crew will make every flight a comfortable one. The philosophy is no-frills but highperformance. The power of safety SpiceJet invests heavily in safety, impeccable maintenance and a high level of expertise. Experienced pilots, engineers and maintenance crew go through rigorous training and are hand-picked for their technical knowledge and expertise. So you can rest assured that there is no cut-back in this key area of modern day flying. The power behind the power to fly SpiceJet's key management personnel are all senior, seasoned professionals and have significant international experience in both launching and managing low-cost airlines. With thousands of cumulative man hours in the industry, the management is committed to bring to customers in India all the benefits of the global revolution in the skies. SpiceJet aims to make travel comfortable, affordable and refreshingly efficient experience for all. Welcome on board India's newest, smartest and most affordable low-fare airline. India, get ready for the power to fly!

AIR DECCAN is a unit of Deccan Aviation Private Limited, India's largest private helicharter company. Formed in 1995, Deccan Aviation Private Limited has carved a niche for itself in the Indian aviation scene with its reputation for providing speedy and reliable heli-services for company charters, tourism, medical evacuation, off-shore logistics and a host of other services. Our Managing Director is Captain G R Gopinath. He is a graduate of the National Defence Academy and has served in the Indian Army. A recipient of the prestigious ROLEX Award for Ecological site farming and the WIPRO PRSI Award, he is the driving force behind the organization. Captain KJ Samuel is the Executive Director and, along with Capt Gopinath, is a founder Director. An experienced Army Aviation pilot, he is a Presidential Gallantry Award winner and still actively flies for the parent company.

Mr S N Ladhani, Chairman of the Ladhani Group of Companies (India's largest Coke Bottler) is on the Board. Another illustrious member of the Board of Directors is Mr Vijay Amritraj, India's best known Tennis star. The company has a modern fleet of ATR-42-320 aircraft, one of the finest and most efficient Turbo-Prop aircraft flying. ATR is a European joint venture between Alenia Aeronautica and EADS. The ATR 42 has become a reference aircraft amongst airlines around the world, by offering a safe, easy to maintain and comfortable aircraft operating on the regional market with the best economics on short haul sectors. To date, ATR has sold over 650 aircraft to more than 100 operators in 73 countries all around the world. Our company has adopted a 'lean-and-mean' approach to staffing and aims at maintaining a low aircraft-to-employee ratio. We have some of the most experienced administrators, aircrew and engineers on our rolls. A good work culture coupled with a skilled workforce is the backbone of the company.