The managements, of both, Bengaluru International Airport Limited (BIAL), and, of their partners, have been going hammer and tongs for the last 18 days, correcting problems. Many of the "teething problems" have been addressed, the few others, hopefully, very soon.

However, the passenger terminal building (PTB) is not a "teething issue", and needs to be expanded on a war footing.

I am comparing the PTBs of Singapore's Changi Airport, Beijing Capital International Airport (BCIA), Rajiv Gandhi International Airport (RGIA), Hyderabad, and Bengaluru International Airport (BIAL), Bangalore.

The graph below shows a comparison in terms of terminal area and annual passenger capacity.

Airport terminals are becoming larger in terms of area per passenger. Case in point, Singapore Changi, consistently rated as the best airport in the world. Despite an acute shortage of land in tiny Singapore, Changi's new Terminal 3, is considerably bigger than the equally luxurious Terminal 2, despite having a lower rated capacity.

Click on the image to enlarge.

Delving in to the details, some startling truths come forth.

Singapore Changi Terminal 2 and Terminal 3, and Beijing Capital International Terminal 3 (which holds the record as the single largest terminal in the world), have a per daily passenger terminal area, THREE times larger than BIAL.

Even the low featured stripped down Changi Budget Terminal, which serves only the Low Cost Airlines (LCAs), and Hyderbad's Rajiv Gandhi International Airport, have a passenger-terminal area ratio 33% greater than BIAL.

Is it small wonder, why the BIAL airport terminal appears so crowded from the day it opened ?

Click on the image to enlarge.

A similar shortfall in capacity, when compared to international airports, is evident, in the baggage handling capacity, but that can get addressed during the expansion.

One reads wildly differing figures on BIAL's terminal capacity, annual passenger capacity claims range from 11 million to 15 million. The BIAL official website claims "The current airport infrastructure is designed to handle over 11 million passenger movements annually. Once the final master plan has been achieved, it can accommodate upto 50 million passenger movements annually".

Bangalore achieved 10.12 million passengers in the financial year Apr 2007 - March 2008. With an 11 million annual capacity, BIAL's terminal, allows for less than 10% expansion. In the past 3 years, 2005 - 2008, Bangalore has achieved 250% growth, in passenger traffic. Admittedly, there has been a contraction in the growth rate, due to the high fuel prices, and loss of passengers on the short haul flights to rail and road, but a 10% increase in passenger traffic is expected in the next 12 months.

The chart below shows the passenger traffic over the last 2 years at Bangalore.

Click on the image to enlarge.

Using the data from the financial year Apr 2007-March 2008, I extrapolated the average number of passengers per domestic flight. As per BIAL, the maximum number of passengers per hour it can handle is 2,733. We also know, during peak hours, the maximum number of flights per hour is 30.

Modelling the peak hour traffic, at 30 domestic flights per hour, using last year's average passengers per flight, and BIAL terminal's peak capacity of 2,733 passengers, a startling figure emerges.

Click on the image to enlarge.

BIAL will be at 90% and above capacity for 11 of the 12 months in the year, and at 95% for the year as a whole. For 4 months, BIAL terminal is close to 100% of capacity.

Running so close to capacity will work only if the situation runs perfectly like a Swiss watch, and we know that is not the case in India. It also does not allow for any any future expansion, a situation, that is equally unpalatable to BIAL as it is to many of us.

I am sure, the BIAL consortium wants an airport that promotes Bangalore's progress, not impede it.

The expansion of the Passenger Terminal Building has to be taken up on a war footing.

All the images are my copyright.

Thai Airways cancels Bangkok-New York non-stop services, sells all four A340-500s
Surging oil prices force airlines to cut back, but Lufthansa expands
By TBM Staff | Mumbai

According to a Centre for Asia Pacific Aviation (CAPA) news report, Thai Airways will cancel its non-stop services from Bangkok to New York and sell all four A340-500s, in response to surging oil prices. It is one of the most dramatic responses to high fuel prices by an Asia Pacific airline till date. Thai will also reduce Los Angeles non-stop frequencies and re-route the service via Japan with B777 aircraft from the winter schedule, as it takes the axe to its troubled ultra long-haul operation. Thai estimates that continuing the New York and Los Angeles routes would result in loss of USD120 million per annum. Further cutbacks by Thai are possible, as the airline reviews its wide body fleet requirements, including cutting its wide body fleet order.

China Airlines will cut ten per cent of its passenger capacity, mainly to the US and Asia, this month onwards, while EVA is trimming its passenger network by five per cent from September this year. Both carriers can however look forward to increasing cross-Taiwan Straits services, with a crucial meeting this week expected to pave the way for weekend charters from next month and eased restrictions on mainland visitor numbers to Taiwan.

Air New Zealand has announced some “tactical” changes to its network, mainly involving short-haul capacity cuts, as well as further fare increases. Jet Airways has also deferred the launch of services to Hong Kong until the winter schedule.

These moves follow announcements in recent weeks by Singapore Airlines, Qantas, China Southern Airlines, China Eastern Airlines and Korean Air to cut some international routes in the face of surging fuel prices. Virgin Blue is expected to announce cuts to its network this week.

However, other carriers including Lufthansa are poised to expand their services in the region. Having no plans of cutting services, Lufthansa will increase capacity between five per cent and ten per cent annually in the Asia Pacific region over the next five years, including a six to seven per cent increase this year. Tiger Airways meanwhile stated it is “waiting with bated breath to pounce on the routes suffering under higher fares, or simply abandoned by, Virgin Blue and Qantas’ Jetstar.” The airline also foreshadowed an expansion onto international routes cut by rivals. Tiger Airways stated that airlines that have lacked discipline to keep costs low are going to hurt the most during times of increasing fuel prices.

Source : TravelBizMonitor.com

Wednesday, 11 June 2008, saw employees of Customs House Agents (CHAs), go on a flash strike, at the two cargo terminal buildings (CTBs) at Bengaluru International Airport (BIAL). The CTBs at BIAL are operated by Air India - Singapore Airport Terminal Services (AI-SATS) and Menzies Aviation Bobba Group.

The AI-SATS warehouse was forced to open on May 24, 2008, along with BIAL, in a completely unprepared state.

As a compromise, since opening, AI-SATS allowed staff of the CHAs, access to the restricted areas of the complex, to help with the cargo. In a show of fair business practices, AI-SATS refrained, from charging demurrage and vehicle parking fees, as a compensation for all the delays.

Menzies was operational from opening date, and did not offer these concessions.

Over the last 18 days they have been putting herculean efforts and have brought the situation to a level of semblance.

Today, AI-SATS have rightfully imposed the warehouse entrance restrictions, and will start charging, demurrage for cargo left uncleared after 5 days, for cargo landing from 9-June onwards, and vehicle parking fees.

At the same time, the working conditions for the CHA staff are still quite poor. They have been facing problems of food availability. The remoteness of BIAL, just magnifies this relatively minor problem, in to a major frustration.

The AI-SATS restrictions, coupled with the frustrations, blew the lid off the situation, and CHA staff resorted to a flash strike, stopping all work at both AI-SATS and Menzies warehouses.

While I fully support the AI-SATS move and condemn the strike action, some of the working conditions complaints are legitimate. The managements of AI-SATS, Menzies, and BIAL need to take a hard look and arrive at some quick solutions.

I have repeatedly voiced concerns about the working conditions at BIAL. "If we do not look after those who look after us, it is just a matter of time"............. today, was just a small example.

Industry has suffered delays to about Rs. 100 Crore worth of cargo today, and Bangalore's economy can ill afford it.

3 Indian cities in world's top centres of commerce

Delhi, June 9: Reflecting the growing global economic clout of the Asian region, three Indian cities -- Mumbai, New Delhi and Bangalore have been ranked among the 75 top centres of commerce in the world.

According to a study titled 'Mastercard Worldwide Centres of Commerce Index', London has been ranked as the most influential city in the world in the 75 cities index.

However, it stated that future appears to belong to Asia and Eastern Europe, whose cities represent the fastest rising regions within the index.

The index is an annual research initiative designed to evaluate and rank how major cities compare in performing critical functions that connect markets and commerce around the world.

"The booming Chinese and Indian economies have clearly continued the shift of economic power to Asia. The strong presence of Asia/Pacific, Middle East and Africa cities is further evidence of the growing influence of the region not just in manufacturing and services, but also in broadly based commercial strength," the report stated.

In 2008, three Indian cities have been ranked in the index of 75 cities with Mumbai at the 48th position, New Delhi at 61 and Bangalore at 66th place, the report revealed.

New Delhi and Bangalore are new additions to the index in 2008 which was extended from 50 cities in 2007 to 75 cities in 2008, while Mumbai, which had been ranked at the 45th place in 2007, has fallen three positions in 2008.

In comparison, China has five cities in the index including Shanghai, a rapidly growing and massive city that ranks 24th this year, up from 32 in the 2007.

"It's fascinating to note that the city whose score increased the most compared with London since last year is Moscow, followed by Singapore, Tel Aviv and Bogota all cities in new or emerging markets while no North American city advanced significantly in the index this year," MasterCard Worldwide Centers of Commerce Program Director Michael Goldberg said.

Besides, the top ten cities in the Worldwide Centres of Commerce include -- London, New York, Tokyo, Singapore, Chicago, Hong Kong, Paris, Frankfurt, Seoul and Amsterdam.

The eight Asian cities which have been ranked in the top 25 centers of commerce, Tokyo, Singapore, Seoul, Sydney, Hong Kong, Osaka, Taipei and Shanghai rank among the top 25 Centers of Commerce, confirming Asia's prominent role in the global economy.

The various dimensions on which the cities are ranked include -- legal and political framework, economic stability, ease of doing business, financial flow, business center, knowledge creation and information flow and livability.

Source : ExpressIndia

The full report can be downloaded here

(XFN-Asia) India's airline sector is flying into huge losses on the back of a surge in global fuel prices that have forced it to hike fares, slowing passenger growth. Its woes pushed the airlines to a combined loss of USD938 billion in the fiscal year to Mar-08 and Aviation Secretary, Ashok Chawla, says the figure could double this year if oil prices remain at current levels.

The forecast represents nearly a third of total global losses of USD6.1 billion projected by the International Air Transport Association last week if oil stays around USD135 per barrel until year-end.

India head of the Centre for Asia Pacific Aviation, Kapil Kaul, said "Aggressive consolidation is inevitable… there will be exits, strategic alliances, airlines will have to work out how to share resources and rationalise route networks so carriers complement each other rather than compete." According to Kaul, right now, India's airlines are losing an average USD30 a passenger.

With fares costlier, domestic air passenger traffic rose just 8.7% in Apr-08 year-on-year - the slowest rate in four years - as travellers switched back to trains and cars or opted not to travel. Passenger growth now is far slower than the annual 25% expansion the government forecast until the end of the decade.

Kaul said"We should see these things (consolidation and route rationalisation) start happening by July, August when the (Indian) off peak season starts… but the next 12 to 18 months will be very hostile."

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

With the global oil price surging, airlines have increased their fuel surcharge five times during the past five months. Even with the fare increases, jet fuel now accounts for nearly 50% of operating costs.

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

Meanwhile, carriers battling to survive are seeking a ceasefire in fare competition. Jet Airways CEO, Wolfgang Prock-Schaeur, said "Airlines are speaking to each other to end the policy of low-priced tickets that's making everyone bleed… [but] raising fares means a problem in filling up planes."

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

Kaul added that, in the short term, the sector's problems could mean deferment of purchases of 25 to 30 aircraft this year, mainly in the narrow-bodied segment.”

Source : Centre for Asia Pacific Aviation

Please use the "BIA Bus & Taxi" link on the top menu bar for the latest information.

Important and mostly forgotten dates in the BIAL saga

• Project conceived in 1991
• June 1998 Tata-Changi-Raytheon consortium walks out over delay in clearance
• May 1999: MoU signed between KSIIDC and Airport Authority of India
• June 1999: Expression of interest invited
• November 8, 2000: Bidders asked to submit detailed project report
• October 29, 2001: Siemen's led consortium selected by Government of Karnataka
• Jan 23, 2002: Shareholders agreement signed
• Jan 2002: Ex-PM Vajpayee performed ground breaking
• Stake holders meeting held in Jan 2003
• Ex-CM SM Krishna performed ground breaking (again!!!) in Jan 2004
• July 2004: Concession agreement signed between State Govt., Govt of India and BIAL
• NOC (No Objection Certificate) pending from Defence Ministry
• Dec 21, 2004: Final clearance given by Dharam Singh govt
• Jan 20, 2005: State support agreement between State Govt and BIAL
• Jan 20, 2005: Land lease agreement between State Govt and BIAL
• March 11, 2005: EPC contracts with Siemens (Germany and India) and L&T
• April 8, 2005: Operation and maintenance agreement - BIAL & Unique Zurich
• April 6, 2005: CNS/ATM agreement between BIAL and AAI
• April 30, 2005: Land lease deed signed BIAL and KSIIDC
• June 10, 2005: Extension of shareholders' agreement
• June 22, 2005: SBI guarantee to state support of Rs 350 crore
• June 23, 2005: Declaration of financial closure by ICICI Bank
• July 2, 2005: Construction commencement date
• November 20, 2006: Concession Agreement amended
• March 7, 2008: First test flight from Bangalore HAL airport to BIAL
• May 24, 2008: BIAL commences operations

As of March, 31 2008 some statistics of the Bangalore HAL airport are as follows :

• 3rd busiest domestic airport in India
• Just 5% behind Chennai as 3rd busiest overall airport in India
  
• AAI operated terminal handled 10.12 million passengers a year
• 311 commercial flights per day
• Additional 30~40 general aviation and defence flights per day
• HAL ATC considered amongst most efficient in the country
  

The state set up a committee in August/Sept 2001 to negotiate the final deal with the promoters. The committee was given a mandate to get the best value for money by exploring avenues of optimising project cost and reducing state support. The committee included :

1. Krishna Kumar, Principal Secretary Infrastructure
2. B.K. Das, Principal Secretary Urban Development
3. H.S. Kempanna, law secretary
4. K. Jairaj, CEO BIAL
5. Nasser Munjee, M.D., Infrastructure Development and Finance Corporation
6. Robert Wadel, President & CEO, Waddel Engineering Corporation [USA]

Some of the information was sourced from Karnataka.com

Bengaluru, June 7: After the initial barrage of criticism over the inconvenience caused to passengers, Bengaluru International Airport has achieved ‘punctuality’ and efficiency within two weeks itself said BIAL CEO Albert Brunner in his first interview to this newspaper after the airport started operations.

Q.Ground handling has become an issue. What is the real problem?

A. There is a lot of misconception about this entire issue. At the new airport the ground handling function is carried out by two concessionaires. The ground handling functions are split between restricted and unrestricted areas. BIAL insisted on airlines using one of the two ground handlers for their ground handling functions at the restricted areas (airside) and the airlines were free to do their own ground handling at the unrestricted areas. This issue arose as some of the airlines demanded they wanted to do their own ground handling even in the restricted (airside) areas.

The reason BIAL insisted on airlines using one of the two ground handlers for their ground handling functions at the restricted areas (the airside) was to make the airside operations safer.

Q. What about the needs of the staff?

A. There is subsidized staff transport available, an airport staff canteen serving food starting at Rs. 20. Going forward (within 7-10 days), there will be an additional café in the parking area which will provide food starting Rs.10.

Q. On reports of delay on baggage clearance?

A. The reason for this was shortage of staff, equipment and not adequate supervision by ground handling concessionaires. The staff strength has been increased.

Q. Air Traffic Control has been facing technical problems, how well-equipped is the ATC?

A. Given the fact that the airport has a brand new ATC (including the airspace, manpower and equipment) along with the entire supporting infrastructure, the ATC functions have been commendable.

Q. There is news that BIA is already running to full capacity, how do you plan to handle the growing air passengers?

A. We would like to clarify that under the present traffic scenario, BIAL can easily handle the traffic for the next 2-3 years. During this time we want to realize the next expansion.

Q. There are talks of re-negotiations on HAL airport issues, what is your take?

A. As you are aware, HAL was shut the day BIAL was operational, i.e. on Friday, May 24, 2008. BIAL has always maintained that Bengaluru needs a single aviation platform for both domestic and international traffic, to allow seamless transfer between domestic and international flights for passengers, cargo and efficient airline operations.

Q. Connectivity is still a far cry, any progress on that front?

A.The on ground transport offered by BMTC was an instant hit with passengers. Even with the existing infrastructure, actual travel experience of the passengers to the new airport, during regular traffic hours, has revealed a com muting time of between 60-90 minutes from anywhere in Bengaluru. From the center of the city, M.G Road, it can be even below an hour. Within a few years we need to have an additional highway and, for environmental and capacity reasons, a dedicated rail link to the airport.

(c) The Deccan Chronicle

In my visit report of 28-May-2008, I have highlighted the shortcomings of BIAL in the services and cargo areas. On 7-June, CNBC-TV18 is confirming, the situation is far from acceptable.

If you are sending a package to or from Bangalore, be prepared for a delay of at least two days. That's not all, you will be paying more for it too! Air cargo agents are struggling to cope with inadequate facilties at the new Bangalore Airport.

Freight forwarders in Bangalore are up in arms. They claim that the ground handling at the new airport is not smooth. They say the cargo is not being off loaded on time and on several instances, entire consignments have gone missing. There is also the problem of warehousing. Logistics companies claim all the warehousing space at the new airport is being monopolized by DHL.

Shesh Kulkarni, President, UTI Worldwide said, "One company has been given an undue advantage which is an unfair business trade practice, this was not transparent and nobody was told how this happened. They seem to have got 12,000 sq ft of space inside premises."

The lack of warehousing and office space at the airport means cargo and employees have to be transported into the city and back to the airport at Devanahalli everyday. It is pushing operational costs by nearly 40%; a cost freight companies say they will pass it on to their customers.

Nirmal Singh Sandhu, President, Bangalore Air Cargo Club said, "We have made some rough working. Costs will go up by 30-40% because it is a direct cost."

Some companies have begun moving cargo to Chennai by road because its simply faster that way. The Air Cargo Club in Bangalore plans to meet with officials at Bangalore International Airport Limited (BIAL) to put forward their requests. They say if their demands are not met they will consider taking legal action against BIAL for unfair trade practices.



I have made some specific proposals for improvement earlier. The losses have already commenced. Insurance may cover losses, but without meaning to sound bombastic, any loss of cargo, is a national loss, and a loss to Bangalore.

Cargo is the core reason of an airport, as far as industry is concerned. With the lack of a seaport in Bangalore the criticality only increases adding to the pressure.

India ranks a lowly 39th in the World Bank's Logistics Performance Index. In all crucial benchmarks India was below rank 40, only the competence of the people in the clearing process (customs excluded) at rank 31, salvaged the overall ranking. This has to improve, and Bangalore has always led the way.

Both the warehouses (Menzies Bobba and AI-SATS) have not taken advantage of the 2 month delay, and are just not ready. Their services are not up to international standards. From reports of airlines, air cargo agents, customs house agents, the situation will stabilise only after 1~1.5 months. This is simply unacceptable. It needs to be set right in 15 days.

BIAL was brought in to deliver a "world class" airport, and this includes cargo. BIAL has to accept a simple fact, ultimately, BIAL is responsible to deliver. The buck stops at Mr. Brunner's desk.

India has established the WRDA, and BIAL management has to realise that it is ultimately responsible for delivering "Global Service" quality levels. It needs to be the big, bad, bar bouncer, and push its people and partners, in to delivering. If any operator cannot deliver results, they should be suspended from operation till they improve.

Some suggestions for BIAL management and their concessionaires' managements

a.
BIAL management should recognise that cargo and logistics operations are a vital part of an airport and its interaction and impact is with a much larger hinterland, when compared to its passenger catchment area. Failures will have much more widespread impact.
b.
Engage with Chambers of Industry and operate with them in an open and transparent manner.
c.
Create a joint Cargo-Terminal, Airline, Cargo-Agent, Customs-Agent and Industry Chambers task force that will meet and measure, on a monthly basis the :

• Effectiveness and Efficiency of the clearing process
• Infrastructure
• Ease and affordability
• Competence of the clearance process and people
  
• Package Traceability
• Reliability and repeatability i.e. confidence level

d.
Bring in the managements of both Menzies Aviation Bobba and Air India-Singapore Airport Terminal Services and get categoric commitments on SLAs, with penalties payable to airlines, importers/exporters, for the following :

• Import Bonding - Target 3 hours
• Import IGM filing - Target 3 hours (if airlines do not comply, ban them)
• Cargo Traceability - No more than 1 hour. GMP or GS1 standards.
  
• Exports - Target 2 hours
• Goods vehicle parking - No truck should stand on the service road
• Infrastructure
  

e.
Make a parking for all the commercial vehicles at the airport. The service road is choked with lorries, LCVs, mini-trucks, goods auto-rickshaws, etc., encroaching and eating up the existing road space.
f.
Need to enforce basic GMP and GS1 standards in warehousing.
g.
Strongly consider adding a third cargo terminal, but ensure you get a very high quality vendor.
h.
Add specialist warehousing options, to increase the value proposition. For example Frozen (below 20 Deg C), Chilled (-4 to +4 Deg C), Cold Room (+4 to +15 Deg C) abilities.
i.
Provide public facilities and toilets for the employees.

These initial steps initiated and monitored by BIAL, and executed by its concessionaires, will go a long way in restoring the fast eroding credibility, and credibility of a business is a very elusive but vital asset.