Kingfisher Airlines firms up Heathrow plans
By Brendan Sobie

India’s Kingfisher Airlines is preparing to launch its first two international routes, connecting Bangalore and Mumbai with London Heathrow, at the end of August or beginning of September.

The carrier also is aiming to begin its first US route, connecting Bangalore with San Francisco, in September or October.

Kingfisher chairman Vijay Mallya confirms the carrier has secured two slot pairs at Heathrow and London will be its first international destination, with daily service from both Bangalore and Mumbai.

“We will start between 31 August and 3 September,” Mallya told a group of reporters during an unveiling yesterday of Kingfisher’s new Airbus A330-200 at the Farnborough airshow.

The aircraft at Farnborough is Kingfisher’s second A330-200 and was delivered last week. Its first A330-200 is now in Bangalore, where it is being used for pilot training.

Kingfisher over the next two months will take another three A330-200s plus five A340-500s. Mallya says the five A330s will be used to operate the new London services plus services from Mumbai to Hong Kong and Singapore.

He says Kingfisher as a new entrant at Heathrow has inherited the slot pair previously used by Brazil’s VRG, which earlier this year dropped all of its long-haul services. He adds Kingfisher has leased a second slot pair for an undisclosed sum from an undisclosed carrier which could become a codeshare partner.

Kingfisher will compete against British Airways, Virgin Atlantic Airways, Jet Airways and Air India on the Mumbai-London route but Mallya says there is enough demand to support all five carriers.

“London is a must-go destination for an Indian,” he says.

Kingfisher will only compete against BA between Bangalore and London. Mallya says the booming southern India market can easily sustain a second service.

Mallya says the carrier’s first batch of A340-500s will be used on a Bangalore-San Francisco service. “We will start in September or October,” he adds.

Kingfisher has been touting Bangalore-San Francisco since it ordered the A340-500 in 2006. Mallya says connecting the two IT hubs is attractive even in today’s environment because IT is one sector not impacted by the oil prices or slowing economy.

“For the Bangalore-San Francisco sector there’s a lot of demand. It’s a unique product because no one else offers it non-stop,” Mallya says.

Kingfisher was also planning to serve New York from Mumbai using the A340-500 but Mallya says this may be scrapped because there is already too much capacity in this market given current demand. “The New York flight we’re looking at very closely,” he says.

Kingfisher hopes to begin selling tickets on its initial batch of international services next month.

All of Kingfisher’s A330s and A340s will be in two-class configuration consisting of economy and “Kingfisher First”. Mallya calls the latter a “super business product” which will be priced “slightly higher than business class prices”.

Kingfisher First is basically a first class product without the divider between seats, which Mallya says is “unnecessary” in today’ environment.

There is also a “social area” in Kingfisher First, with a staffed bar, two sofas and bar stools. He says in the carrier’s A340-500s there will be two bars in Kingfisher First and a smaller one in economy.

Mallya says he got the idea of the bar from the Boeing 747, which used to have bars in the upstairs.

“We don’t see them anymore. They’ve all been replaced by seats,” he says.

Kingfisher’s widebody fleet will also feature a custom-designed first class seat from B/E Aerospace and an IFE system with large individual screens from Thales.

“It will be the best in the sky and the best in the sky won’t come cheap,” Mallya says.

Source : FlightGlobal

India, the world's largest democracy, has a sorry record in sound and bold economic administration. Populist measures abound, and nothing is sacred or immoral in the perpetual quest to obtain and then secure the "gaddi".

Fuel pricing in India is a prime example.

Officially, the "Administered Price Mechanism" was abolished in 2002, but today, the Indian government has a greater control on the fuel market and prices than ever before. Private operators have been driven out of the market, and only the Government owned companies survive.

Government have become addicted to their windfall fuel tax income. In the last 6 years, fuel tax collections have increased almost 250% to a staggering Rs. 170,000 Crores (Rs. 1.7 trillion or US$ 41 Billion).
Indian bureaucrats have learnt well from the Europeans and their "tax and spend" Keynesian economic models. Fuel taxes are greater than the cost of the fuel. In Bangalore, when we pay Rs. 57 for a litre of Petrol, Rs. 32 is taxes, only Rs. 25 is the cost of the actual fuel. Internationally, the cost High Speed Diesel ex-refinery (excluding taxes, duties, levies, etc), is marginally higher than Petrol. Yet, in India, Diesel costs 35% less than Petrol, thanks to lopsided tariffs and populist driven subsidies.

The one fuel that is truly free in pricing is Aviation Turbine Fuel (ATF). Thanks to the government induced haemorrhaging, and the traditional, but wrong view, of air travel being a luxury, oil companies are using deregulation on their favourite whipping boy -- ATF. In India, ATF costs double than prevailing international prices.

The results are plain to see. Despite being leaders in the global airline growth story, airlines in India, today, are bleeding, and bleeding bad. Losses in 2008-9 fiscal, are expected to cross $2 billion. Unable to sustain, in sheer desperation, airlines are hiking air fares, cutting back schedules, deferring aircraft deliveries, laying off staff, even considering importing their own fuel.......... in short, anything, to cut down losses.

This has resulted in air traffic crashing all across India. In Bangalore, the shining example of India's air traffic growth, from an annual growth rate of 33% year on year, for the first time since 2001, air traffic is actually falling to levels below that of the previous year.

Additionally, due to the remoteness of BIAL airport, regional air traffic is decimated, with air passengers switching to trains and buses instead. We might be tempted to say "so what". But we overlook the productivity aspects in the slower transit time of trains and buses. And in today's globally competitive economy, productivity matters.....a lot.

The operators of the Bengaluru International Airport, BIAL, now face an additional quandary. The airport terminal is reportedly, under capacity, and needs immediate expansion. Till now, their primary source of revenue, has been landing charges levied on flights. Thanks to a reduction in flight operations by the airlines, their income stream and cash flows have been reduced. So BIAL is increasingly forced to rely on passenger based User Development Fee (UDF), which has both the Government and passengers united in their opposition.

An imposition of UDF by BIAL on domestic passengers will only aggravate the already bad situation, and result in a further compression of air traffic. A downward spiral into a bottomless pit.

A possible solution requires bold decisions. Something both the political and administrative establishment in India are not known for.

• Government has to pledge at least 10% of its fuel taxes towards public transportation infrastructure. My friends in the auto industry will hate me for this suggestion, but our cities are choking in their own growth.
  
• ATF pricing should be reduced to international price parity. Ex-refinery, and taxes, union and state. Everyone should share the burden, including the airports and airlines. They must pass on the savings and re-invigorate the market, not use it to butress their bottom lines. The downstream impact of the aviation industry is far greater than the losses sustained by price reduction. We must not forget, every aircraft purchased by India, results in huge "offsets" i.e. mandatory exports of other goods and services.
  
• A moratorium on UDF for at least 12 months by all airports in India. Keep costs low. It will pinch, but the increase in flight operations will butress some of the revenue loss.
  
• Allow HAL airport to handle regional air traffic. By sticking to its hardline, BIAL will only continue to drive passengers away from the air, to trains and buses. A negative for all stake holders, including the citizens of Bangalore.
  
• Diverting part of the regional traffic to HAL will also give BIAL breathing room, and delay the need for investment in a costly second terminal, till global economic conditions improve.
• Forget a "temporary terminal". Passengers will not accept travelling 50km, paying a UDF, and then using a "tent".

This is just one view point. Other constructive suggestions are welcome via the comments section.

Plane truth: Trains fare better
By Nandini Chandrashekar, DH News Service, Bangalore:

Frequent short haul air travellers from Bangalore seem to be preferring the train, discouraged by the distance and time taken to travel to the new Bengaluru International Airport (BIA).

South-Western Railway officials here have noticed a great increase in passengers notably on the Shatabdi trains running between Chennai and Bangalore. Booking on these trains have been steady at 100 per cent beginning from the month of May.

Five trains ply daily between Bangalore and Chennai at present, excluding a weekend train. While most of these trains do experience heavy traffic, the Shatabdi has been facing unprecedented rush for the past two months and the trend appears set to continue.

Bangalore Divisional Railway Manager Akhil Agarwal told Deccan Herald that booking had increased significantly on Chennai, Hyderabad and Kochi-Trivandrum routes.

“We are going to observe this for a couple of more months and if the trend continues, then we will either add coaches to the existing trains or add a new train on the route.”

Shatabdi trains at present are running with seven coaches and these are likely to be augmented to 10 coaches.

Officials are still keenly watching the other sectors like Hyderabad and Kochi. There has been a definite increase in bookings on the Hyderabad route as well, but a senior railway official pointed out that it could also be due to the introduction of the Garib Rath train in the month of February.

The route towards Kochi and Trivandrum is a busy sector any time of the year and it has been difficult to establish the reason.

Travel agents have no doubts whatsoever, about the decline and the reasons for it. Rakesh P of Jagadish Air Travels admitted that they had a staggering 65-70 per cent drop in air ticket bookings to Chennai after the opening of the new airport. His clients clearly expressed their unwillingness to travel the long distance to the airport for a 30-minute flight.

He also said a considerable number of his clients who flew to Chennai to visit the consulates now prefers Shatabdi or a bus. In fact, so popular has been the demand for buses, that the agency started bus bookings as well to keep in tune with the customer requirements.

Another travels, Classic Air Travels, has also experienced a 50 per cent drop in their bookings to Chennai.

Interestingly enough, the passenger traffic to Hubli and Mangalore has fluctuated slightly, but nothing to indicate decreased air travel.

The reason, says Rakesh, could be because the number of travellers on this route have always been less, due to high costs and the ones that did travel could well afford it and would continue doing so.

Buses to Chennai seem to be faring pretty well considering that this is considered to be a slump season.

Phanindra Sama, CEO of redbus.in, the online portal offering reservations for 300 bus companies, said that sale of tickets to Chennai had jumped by about 35 per cent.

The increase was across all kinds of buses as the travel time is only five hours.

This time advantage seems to have encouraged software companies, who send their employees to obtain visas, to take the bus.

“There is a definite cost and time advantage to taking the bus to Chennai these days,” he added.

Source : The Deccan Herald