400 Air India air hostesses declared absconders

NEW DELHI: This is a telling comment on the decline of Air India from a glamorous airline where dreamy eyed girls dreamt of getting a job in the heydays of JRD Tata’s stewardship, to asarkari organization now fraught by uncertainty following years of government mismanagement. The Maharaja has discovered that almost 400 air hostesses of its cabin crew strength of 3,600 who had taken a two-year leave without pay as per company policy have simply not returned to work although their leave got over a long time back.

AI has now declared them absconders and is beginning a process to sack all those who fail to give a convincing reason for their continued absence from work. Almost 300 of the 400 absconding airhostesses are learnt to be from Delhi alone.

“They must have left at a time when the airline faced uncertainty (which it still does); salary payment was irregular and must have taken up job elsewhere. Once they got jobs elsewhere, they should have resigned from here and not remained on the rolls. However, we officially have no information on them. The probe of the first tranche of 44 absconders will soon be over and we may sack many of them,” said a senior official.

The government’s questionable decision to buy 111 new planes for over Rs 50,000 crore and drowning the airline in debt has led to a state of complete penury in AI, forcing it to survive on taxpayers’ bailouts. “Salary payments remain uncertain and the airline’s survival looks bleak. In this atmosphere, a number of people are eying jobs elsewhere,” said a senior employee.

The airline stumbled on the absconders while asking all of its cabin crew to appear for medical test from January. After much reservation from the mostly unfit and overweight AI cabin crew, a majority of whom are airhostesses, the airline conducted fitness tests on 3,200 employees from January to March while having a total strength of 3,600.

“Almost 40% of the 3,200 cabin crew was found to be unfit, with 557 of them being ‘morbidly obese’. These personnel face the risk of being put on ground duties unless they get back in shape within a deadline of six months. The second round of tests is going to begin now for those who gave the medicals in January. A majority of the airhostesses found really overweight are from erstwhile AI,” said the official.

The management’s move is being backed by the parent aviation ministry with the latter now toying with an idea which is a norm for all private carriers but not heard of in AI — fixing a lower maximum age to remain an airhostess. The retirement age for AI employees is 58 and an airhostess can fly till the day she retires.

Many years ago (in its heady days) the age limit was 45 to have a mix of youth and experience. “The ministry is now planning to have a lower age ceiling for AI airhostesses after which they will transferred to ground duties where they will remain till the age of 58,” said an official. Outgoing CJI’s bid to appoint SC judge nipped.

Source: The Times of India


Striking Air India pilots begin indefinite fast

NEW DELHI: Striking pilots of erstwhile Air India on Sunday began an indefinite fast at Jantar Mantar and have vowed to remain there till the government starts a dialogue with them on their demands.

The agitating and now-derecognized Indian Pilots’ Guild said 11 pilots would be on fast for at least 48 hours after which their place would be taken by fresh set of strikers.

 

The agitating and now-derecognized Indian Pilots’ Guild (IPG) said 11 pilots would be on fast for at least 48 hours after which their place would be taken by fresh set of strikers. A similar exercise will begin at Mumbai’s Azad Maidan from Monday.

“Our agitation has entered the 48th day and no one has even spoken to us. We want to get back to work and someone needs to tell us how we can do that. Private airlines are going full and benefitting from the stalemate in AI,” said Sumit Dhir, a sacked commander.

A senior ministry official said the airline would have no problem taking the sacked people back. “Only serious thought would have to be given the 10 sacked leaders of the derecognized IPG,” he said. However, the IPG has said that either everyone goes back together or no one does. Close to 450 members of the IPG have been on strike since May 7.

Source: The Times of India


Flying out of Delhi and Mumbai to get cheaper

NEW DELHI: There’s good news for air travellers. Flying out of Delhi and Mumbai may get cheaper from January 1, 2013, with aviation minister Ajit Singh on Tuesday ordering abolition of airport development fee (ADF) that has been charged from outbound flyers at these two hubs since 2009.

 Mumbai airport levies Rs 100 and Rs 600 on each domestic and international passenger as ADF. Delhi airport charges Rs 200 and Rs 1,300 as ADF from every domestic and international outbound flyer along with a hefty user development fee (UDF) of Rs 196 to Rs 1,068 from all flyers, including incoming ones. The combined impact of these two fees has made Delhi among the most expensive airports in the world for passengers to use.

The government had controversially approved ADF in 2009 to bridge the funding gap of modernization projects at these two airports, ostensibly to allow completion of Delhi’s terminal 3 in time for Commonwealth Games 2010 as Mumbai still remains work in progress. “The expected financing gap in case of Mumbai International Airport Ltd (MIAL) will be Rs 4,200 crore while in case of Delhi International Airport Ltd (DIAL), it will be Rs 1,175 crore if the ADF is abolished from January 1, 2013,” said an aviation ministry statement.

Singh wants this gap to be met through a mix of debt and equity by stakeholders in MIAL and DIAL. Accordingly, the state-run Airports Authority of India (AAI), which has a 26% stake in both these projects, will infuse additional equity of Rs 288 crore in MIAL and Rs 102 crore in DIAL.

“If the present funding gap in MIAL and DIAL are met by equity infusion and loans by the promoters including AAI, ADF will stand abolished,” said the statement. Clearly, the best case scenario for passengers is that MIAL and DIAL raise the entire gap through a debt-equity mix after which they no ADF needs to be paid. A failure to do so would see ADF getting reduced proportionately or getting translated into higher airport charges to recover the same.

DIAL indicated this in a statement. “DIAL in consultation with its partners will, at the appropriate time, based on further communication by AERA, if any, take the views of its lenders and equity partners and analyze its financial structure, including ability to raise further debt and equity, and also the consequential increased impact on the aeronautical tariffs and respond appropriately to AERA,” it said.

Minister Ajit Singh had last week asked AAI not to charge ADF at its upcoming new terminals in Chennai and Kolkata. Now these two new airports, along with Mumbai, will levy only UDF as determined by the Airports Economic Regulatory Authority (AERA). If Delhi and Mumbai airports fail to raise the entire amount, the level of ADF still needed to be charged from next January could be added to UDF charged there or be recovered through higher airport charges.

The levy of steep ADF and UDF has been slammed by almost everyone in the past – the Comptroller and Auditor General (CAG), passengers and parliamentary committees. A CAG report on DIAL tabled in Parliament three months back had slammed using ADF to fund the soaring project cost that went up 43% from the original Rs 8,975 crore in 2008 to Rs 12,857 crore two years later. The project was proposed to be built through a mix of debt and equity alone with no extra burden on passengers. But with the cost going up, the aviation ministry in 2009 approved the ADF. “This led to undue benefit to DIAL at the cost of passengers who were taxed for using Delhi airport through levy of (A)DF amounting to Rs 3,415.35 crore,” the report said.

Source: The Times of India 


Jet Airways Jet to withdraw JFK flights from Sept

Loss-making carrier Jet Airways today said it will temporarily suspend services to New York (JFK) from September 10, though it would continue to operate to Newark International Airport.

The airline, which posted a loss of over Rs 294 crore in the quarter ended March 31, said that as part of its “ongoing network evaluation with clear focus on profitability, the airline will be redeploying its assets on its existing route
network.

“This has hence necessitated the temporary suspension of the airline’s Brussels-New York (JFK) flight effective 10th September 2012.”

However, Jet would continue uninterrupted to two major gateways in North America, Newark and Toronto, with its Mumbai-Brussels-Newark and Delhi-Brussels-Toronto routes,” it said in a filing to the BSE. Regarding those passengers booked on the JFK flight beyond September 10, the airline will “ensure that the affected guests are offered alternative flights on our own services to New York (Newark) or that of partner airlines” then onwards.

The company said the decision to stop the JFK flight was taken “in view of the current global economic conditions and its impact on business worldwide”.

Jet Airways recently decided to cut money-losing international routes, including long-haul flights to Johannesburg and some short-haul flights to the Gulf as part of a consolidation plan.

Source: Money Control 


IndiGo ready to make its international debut

In January this year, it surprised the aviation world by placing an audacious $15.6-billion order on Airbus for 180 new A-320neo upgraded aircraft, to be delivered from 2015. It was touted as one of the largest aircraft deals globally.

But IndiGo – already the number-three airline in the domestic market, with a market share of 19.7 per cent, just a whisker away from Kingfisher Airlines (20 per cent) – is not doing anything audacious as it makes its international debut.

This time it will be a quiet and low-profile entry.

Come August and the airline would start with a nine-aircraft fleet to fly to destinations in Southeast Asia and West Asia.

Initially, it will operate from just two cities, Delhi and Mumbai, but it could be followed by Kolkata.

Aditya Ghosh, the low-profile CEO of the airline, says his airline would fly about 20 per cent of its seating capacity overseas – nine aircraft out of a fleet of 50 – for its international foray.

“We hope to launch by August and start our bookings in June” is all that Ghosh is ready to say.

But IndiGo has a pretty clear idea about where it will be flying. Permissions have already been taken for this.

So, its first few flights will connect Delhi directly to Singapore, Bangkok and Dubai.

It is still pushing for slots at the Mumbai airport (which are difficult to get), so that it can connect directly to Singapore, Dubai and Muscat too.

IndiGo executives say it will fly these destinations in the morning from India and come back in the evening using the same aircraft. It will also fly neighbouring country capitals like Colombo and Kathmandu.

For the time being, it is concentrating on getting the necessary permissions needed to start booking for international destinations on the net by the beginning of June so that customers could pick up tickets in advance.

It is also working out holiday packages for leisure travellers where it can pass on to the passengers the benefit of volume discounts on large bookings.

The airline, of course, believes that international travel will provide it better margins, given that it is already making reasonable profits that they do not divulge.

Those close to the airline say the logic is simple: A Delhi-Chennai return average fare on a low-cost carrier is around Rs 10,000. Yet, for a similar distance from Mumbai to Dubai, the airline could charge around Rs 14,000-15,000 on an LCC.

“Apart from the higher yield on tariff, we save on fuel costs. ATF is cheaper for international flights and, in some cases, you burn less oil per kilometer when the cruise time is longer,” says an IndiGo executive.

Surely, ATF prices for domestic flights are about 60-80 per cent more expensive than what is available in cities like Bangkok, Singapore or Dubai. Also, differential taxes have ensured that ATF fuel in the domestic market is also around 23 per cent cheaper for international flights.

“Considering that ATF is 40-50 per cent of our cost, this comes as a major saving that goes straight to the bottom lines,” says an industry insider.

Margins and profitability are better but so is competition and IndiGo also knows this.

On the one hand, Air Asia already flies seven destinations in the country – Bangalore, Chennai, Delhi, Kochi, Kolkata, Mumbai and Tiruchirapalli – connecting these to both Kuala Lumpur and Bangkok

It already offers rates at Rs 11,000-12,000 on an average for a return fare – much cheaper than full-service carriers, whose average rates are between Rs 18,000 and Rs 22,000.

Thai AirAsia CEO Tassapon Bijleveld says: “Around 45 per cent of travellers from India are leisure travellers. This is why we are looking at direct flights to Phuket from India. The flight may be from Kolkata.”

He is also looking at new destinations like Amritsar and Pune and Varanasi. More important, India is a key market the airline is planning to expand in 20 new destinations, of which six-seven would be in India.

Even home-grown LCC SpiceJet is planning its second phase of expansion in August-September to the same markets that IndiGo is targeting.

“We plan to start flights to South Asian and West Asian countries by August or September, as some of our Boeing aircraft will be delivered during that period. We have applied for permission from the civil aviation ministry for a lot of destinations in these two regions and are awaiting permissions,” said CEO Neil Mills.

Moreover, Air India’s entire revival plan is based on putting in more capacity and more share in these two key markets. But the good news is that Ghosh believes these markets will grow for LCCs by at least 20 per cent a year and there is space for everyone.

Industry estimates show that 60-65 per cent of the market for international travellers will come from these two markets. And West Asia itself is expected to see passenger growth going up from around 16 million a year at present to over 22 million in 2014.

Even IATA’s projections suggest both Southeast Asia and West Asia are key markets, growing by 8.5-10 per cent CAGR, much higher than the overall international market growth of around 8 per cent between 2000 and 2014.

The other good piece of news is that the government, to protect Air India, has already made the fresh round of bilateral talks for more capacity to foreign airlines very difficult.

According to Air India’s assessment, if that happens, the bilateral of foreign carriers in West Asia will be exhausted by 2013, while that of Southeast Asia would be over by 2012.

This will ensure that they cannot grow further. But about 40 per cent of the Indian capacity is still unutilsed.

So Air India may pick some of it if it gets new aircraft, but LCCs like IndiGO, which are getting new aircraft, could piggybank on this advantage.

Besdies these, many new international LCC challengers have not yet been able to make any dent in the Indian market.

For instance, Fly Dubai has connectivity to only Hyderabad and Lucknow through a thrice-a-week flight, even as it has aggressive expansion plans.

Singapore Airlines, which recently announced a low-cost service, is directed more to take on Air Asia on its long-haul service business, which is growing very quickly, rather than in short haul markets like India, industry expert say.

IndiGo has been a quiet performer in the domestic skies, growing its market share steadily and acquiring new aircraft according to its schedule, in spite of the economic slowdown a few years ago.

The question is whether it will be able to repeat the same magic in its overseas foray.

Source: Rediff.com