IndiGo joined fellow airlines Air India, Jet Airways, JetLite, Kingfisher Airlines, and Kingfisher Red and announced a cut of Rs 400 in its fuel surcharge across all domestic routes, today.

IndiGo President Aditya Ghosh said

"Effective December 6th, IndiGo has reduced its fuel surcharge to match that of Air India, Jet Airways and JetLite,"

He said this was aimed at keeping the promise of affordable fares and passing on the benefits of the recent reduction in aviation turbine fuel (ATF) prices to the air travellers.

Fuel cost constitutes between 40 and 50 per cent of the total operational cost of an airline in India

Air India launched (05-Dec-08) a promotional scheme for passengers travelling on its select domestic metro sectors. The scheme titled ‘Winter Warmth’ will be applicable for travel between the four metros - Delhi, Mumbai, Kolkata and Chennai; and also between the four metros cities and Bangalore/Hyderabad.

The scheme, aims at frequent flyers - award of one free return ticket of two coupons on the domestic network of Air India for those undertaking a minimum of eight flights on select sectors between 05-Dec-08 and 05-Feb-09.

The Free Domestic Return Award ticket will be available for all destinations on the domestic network of Air India with the exception of Delhi-Kozhikode-Delhi, Delhi-Kochi-Delhi, Delhi-Thiruvananthapuram -Delhi and Delhi-Coimbatore-Delhi.

The award ticket would be issued in Economy Class to those who have undertaken their travel in either economy class or a mix of economy and business class. However, in case of exclusive travel on Business Class the award ticket would be issued in Business Class. The Passenger Service Fee (PSF) on the award ticket would be borne by the passenger. No FFP points will accrue on the award ticket. The Award ticket authority will be valid for 30 days from the date of issue. Travel on the Award ticket must be completed within three months from the date of issue.


Paramount Airways announced (02-Dec-08) it has launched a promotion - ‘A Sepcial holiday bonanza offer’. The offer allows passengers to purchase one Elite Business class ticket and receive a complimentary ticket* for free. (*INR1500 payable for taxes and surcharge on the companion ticket).

This offer is valid for travel during the peak holiday season. With the introduction of new flights Western India, key cities like Ahmedabad, Goa and Pune are now linked to Madurai.

A new frequent flier programme, ‘Paramount Royale, has also been launched. In addition to upgradation and mileage redemption, Paramount Royale members can also avail of golf club memberships and spa services.

Following reductions from fellow airlines, Kingfisher Airlines and Kingfisher Red, today, announced reduced fuel surcharge on air tickets.

The cut on fuel surcharge on all domestic routes will be applicable with immediate effect, a company spokesperson said.

Kingfisher Red (formerly Air Deccan) has reduced fuel surcharge

• For routes under 750 kms, the fuel surcharge is reduced by Rs. 300, from Rs. 2,250 to Rs. 1,950.
• For routes over 750 kms, the fuel surcharge is reduced by Rs. 200, from Rs. 2,900 to Rs. 2,700.

Kingfisher Airlines has also reduced the fuel surcharge

• For routes under 750 kms, the fuel surcharge is reduced by Rs. 400, from Rs. 2,350 to Rs. 1,950.
• For routes over 750 kms, the fuel surcharge is reduced by Rs. 400, from Rs. 3,100 to Rs. 2,700.

Kingfisher Airlines will start operations to its second international destination with the launch of daily direct flights from Mumbai to London from January 5, 2009.

A330 image is my copyright
According to the release issued by the airline, a brand new Airbus A330-200 will be deployed for the route. Kingfisher Airlines commenced its international operations on September 3, 2008 with its Bangalore-London service.

The launch of the Mumbai-London is a result of Ministry of Civil Aviation (MoCA) granting the airline permission on Tuesday to operate on eight international routes namely: Mumbai-London, Mumbai-Hong Kong, Mumbai-Singapore, Chennai-Colombo, Kolkata-Dhaka, Kolkata-Chittagong, Bangalore-Bangkok and Mumbai-Bangkok.

The service will compete head-on with the daily service of Jet Airways, Kingfisher's recent alliance partner. The impact of this service remains to be seen. Will it result in the recently formed alliance crumbling ?

I urge Dr. Mallya and his team to offer more services ex-Bangalore, which is, after all, the home of the airline.

I was just reading an article on Business Standard about no fare cuts by Jet and JetLite, and in the background, I get this news from Jet and JetLite.

From tomorrow, December 6, 2008, JetLite has announced a reduction in applicable passenger fuel surcharges on all domestic routes.

• For routes under 750 kms, the fuel surcharge is reduced by Rs. 300, from Rs. 2,250 to Rs. 1,950.
• For routes over 750 kms, the fuel surcharge is reduced by Rs. 200, from Rs. 2,900 to Rs. 2,700.

Similarly Jet Airways has also reduced the fuel surcharge.

• For routes under 750 kms, the fuel surcharge is reduced by Rs. 400, from Rs. 2,350 to Rs. 1,950.
• For routes over 750 kms, the fuel surcharge is reduced by Rs. 400, from Rs. 3,100 to Rs. 2,700.

While these reductions are welcome, I am wondering why is the reduction not greater on the longer distance routes. With massive reduction in aviation turbine fuel prices, wouldn't the savings to airlines be greater ?

Read a nice article by Anjuli Bhargava in the Business Standard today, about the airlines' ticket prices, the fuel prices, and the politicians. I strongly recommend your reading it.

Ms. Bhargava asks

Can someone enlighten me as to what’s going on? I am referring to this quid pro quo that’s been playing out through the media between the airline industry, the aviation ministry and the government.

Sure I can Ms. Bhargava. We consumers are being taken for a ride. I have written how.

• Click here for all articles about the fuel prices.
  

• Click here for all article about the zero commission issue.
  

• For an analysis on the current crisis in Indian aviation click here.
  

Talking of the zero commission issue. The travel agents have become smart. They have decided to target the airlines one at a time. From yesterday, travel agent, including the online agents, have stopped issuing Jet Airways or JetLite tickets. To ensure maximum impact on Jet, and continued income for themselves, the agents will continue to issue Kingfisher and Air India tickets. Within a week they expect Jet to soften its stand. Then they will go after Kingfisher, and on and on, one airline at a time.

What is the fight all about. Very simple.

Till November 1, all full service airlines used to pay travel agents a 5% commission on the basic fare. This was built in to the cost of the ticket. If you or me, went direct to the airlines' websites and bought the ticket, the airline kept the 5% commission for itself.

On November 1, the airlines stopped the commission and told agents to start charging a "transaction fee" ranging from Rs. 350 to Rs. 10,000, per transaction. The agents are willing to do that, but expect the airlines to charge the same transaction fee from direct customers who go to the airline office or website, so that a price parity is maintained.

The airlines are unwilling to do that. Now that the costs are out in the open, we customers have started complaining. Herein lies the crux of the matter.

It may not be $700 billion as for Wall Street, but we customers are being called on to bail out both the airlines and the travel agents.

And just as a reminder, the fee is per TRANSACTION. i.e. if you change your ticket, or even cancel your ticket, you have to pay the fee again, and again, and again.

The Wall Street Journal reports

Boeing Co. may further delay first deliveries of its flagship 787 Dreamliner by at least six months to account for the recent strike by union machinists and other snags.

According to people familiar with the situation, Boeing officials are expected to announce later this month that first deliveries of the fuel-efficient jet might not occur until summer 2010, more than two years after the jet was originally scheduled to enter service. Boeing's most recent schedule called for initial deliveries in the third quarter of 2009.

In recent days, these people said, Boeing has been meeting with suppliers and partners on the jet program to get its arms around a number of challenges that have sprung up in part because of the volume of work that Boeing had outsourced

Problems with the high-profile jetliner project have become a growing embarrassment for Boeing, which had prided itself on delivering its jets on time. Another delay would mark the fourth time that Boeing would have to tell the customers holding orders for almost 900 of the planes that it will be late.

On Bangalore Aviation, I have reported stories of the strikes at Boeing, and the delays it have caused.

A Boeing spokesman declined comment saying

the company is "currently reviewing the schedule" and would have an announcement at a later date.

Naturally customers are not happy. The WSJ article quotes one of the customers, Virgin Atlantic

In a recent interview, Virgin Atlantic Airways Chief Executive Steve Ridgeway voiced customers' growing frustration. "We're pretty fed up," he said. "We've got no clarity from Boeing."

Virgin was originally due to receive its first Dreamliner in 2011, but "we don't know how long the delay is now," Mr. Ridgeway said. He referred to the Dreamliner as "the world's rarest airplane."

DNA reports how airlines are killing the goose that lays golden egg, by resorting to price gouging at Mangalore

As per DNA

Businessman Abdul Wahab had to make a sudden trip from Bangalore to Mangalore recently. He walked into the office of one of the airlines at the BIAL airport. The ticket he bought cost him Rs. 8900. A while ago when he made same trip the ticket had cost him Rs.3800 on a no frill airline.

The article goes on to say

The airline officials told DNA news on Wednesday that the fares are worked out on a day-to-day demand basis. If the passenger wanted to travel to within 3-4 hours before the check in time the fare will go up by 25 to 35 per cent and if the time is shorter the fare could go up by 45-50 per cent.

While Mangalore-Bangalore fare is Rs. 4900 on a reserved seat, it goes anything up from Rs. 8900 to 9000 per seat if the tickets are bought over the counter. Rates have also gone up in Mangalore-Mumbai sector with the cost wildly varying depending on varied factors.

Mangalore-Bangalore flights have taken the most beating. The airline tickets have not only become costlier but the passenger has to spend an extra two hours to travel between the Devanahalli airport to the city as the airport is situated some 40 kilometers away from the city.

The effect of global melt down and cash crunch may have contributed to the slack in domestic air travel, but the unimaginative fare structure has done not a little harm. The figures of August -November 2008 shows a total of 40,352 people have flown on domestic routes from Mangalore while the figure for the corresponding period last year was 47,207.

The result of these mis-adventures. Passengers left the skies in droves, and took to trains and buses, prompting the airlines to cut flights, and loose even more money

Read the whole article here.

All the major airports across India have been turned in to fortresses following perceived threats.

The jitters created a security scare at New Delhi’s Indira Gandhi International airport in the early hours of Friday, and triggered panic among passengers and sent security officials into a tizzy.

The chaos began when a sound similar to gunshots were reportedly heard from the facility.

The control room of the CISF received a call at around 1.10 am IST from passengers that they heard sound of gunshots from the vicinity of Gate 4 of international departure lounge of the airport.

The security was immediately stepped up but police could not ascertain the cause and the nature of firing. "We received a call that some passengers heard a sound similar to two gunshots, but there were no eyewitnesses. No evidence has so far come up to suggest that it was a firing and we cannot confirm it as a gunshot," DIG, CISF Udayan Banerjee said.

There is speculation that the initial "cracks" heard could have been a plastic bottle or tetra-pak coming under the wheels of some vehicle.

Post the 26/11 carnage, some pranksters are taking cheap thrills by attempting panic amongst an already jittery public.

But to re-iterate, everything at Delhi and across India is normal. Do not give in to "FUD".

-- Fear, Uncertainty, Doubt.

Images courtesy AP

Jon Ostrower, of FlightBlogger, probably the best aviation blog around, has uncovered an internal Airbus competitive intelligence briefing on their arch rival Boeing's 787 Dreamliner program. A briefing, filled with juicy details.

Even if you are not interested in commercial aircraft development, I recommend reading both Jon's article, as well as the Airbus presentation. It is a stunning eye opener in to the process and world of corporate intelligence.

Click here to read Jon's blog article.

And click here to read the Airbus presentation.

Delta Air Lines is taking another step in aligning and combining its frequent flier program with recently acquired, Northwest Airlines' WorldPerks program: It will let SkyMiles members earn elite status by flying a certain number of segments.

Delta announced elite and reward changes to both the Delta SkyMiles® and Northwest WorldPerks® programs to better align member benefits.

Beginning in 2009, the programs will offer segment qualification, currently a WorldPerks benefit, to allow members to reach elite status by flying a designated number of flight segments on either Delta or Northwest operated flights.

Additionally, SkyMiles and WorldPerks members will continue to earn a minimum of 500 Elite Qualifying Miles and base miles per flight, making Delta the only major airline to maintain this minimum for all customers.

Jeff Robertson, Delta’s vice president of Loyalty Programs said :

“Delta’s merger with Northwest creates a unique opportunity to build the world’s premier loyalty program for our customers, including providing access to more frequent flyer destinations around the world and adding new benefits,”.

“Delta’s 2009 loyalty programs will distinguish themselves from the industry with the return of segment qualification for Delta SkyMiles members, the availability of complimentary upgrades on both airlines for SkyMiles and WorldPerks members, and valuable Elite Threshold Rewards.”

Qualification requirements for Elite status in 2009 will be as follows:

Level	2009 Qualification Requirements
Silver	25,000 Elite Qualifying Miles or 30 Qualification Segments
Gold	50,000 Elite Qualifying Miles or 60 Qualification Segments
Platinum	75,000 Elite Qualifying Miles or 100 Qualification Segments

As usual, elite status enables members to receive additional program benefits, including complimentary upgrades, mileage bonuses, priority boarding and preferred seating.

SkyMiles and WorldPerks elite members now have the ability to receive complimentary upgrades on both airlines.

SkyMiles members will qualify for Medallion® Threshold Rewards when they surpass Platinum Medallion status. As members reach designated thresholds (to be published in early 2009), they will earn additional bonus miles and/or other exclusive benefits or gifts. Northwest WorldPerks members will continue to enjoy similar Elite Extra Perks program benefits when they surpass the Platinum qualification requirements.

In an effort to closely align the two loyalty programs’ benefits, Northwest WorldPerks will introduce three-tiered award availability and SkyMiles and WorldPerks members will have the ability to transfer miles between their respective accounts in early 2009.

Delta plans to merge both programs to create the world’s premier loyalty program in late 2009. More information on these and other SkyMiles benefits is available at delta.com/skymiles. Details on the Northwest WorldPerks program are available at nwa.com/worldperks.

One frequently hears the term "fuel hedging". May not be much in India, since airlines are not allowed to import fuel directly, and the government controlled oil marketing companies Indian Oil, Bharat Petroleum, Hindustan Petroleum, etc., do not practice hedging.

Fuel Hedging is a contractual tool used by some airlines to stabilize jet fuel costs. A fuel hedge contract commits an airline to paying a pre-determined price for future jet fuel purchases. Airlines enter into such contracts as a bet that future jet fuel prices will be higher than current prices or to reduce the turbulence of confronting future expenses of unknown size. If the price of jet fuel falls and the airline hedged for a higher price, the airline will be forced to pay an above-market rate for jet fuel.

Southwest Airlines is touted as a model fuel hedger. Southwest's aggressive fuel hedging has helped the airline avoid some of the pain of the recent airline industry downturn resulting from high fuel costs. Between 1999 and 2008, Southwest saved approximately $3.5 billion through fuel hedging.

In short fuel hedging is hard to understand and even harder to get right, especially in the past year with prices as volatile as they have been. We have seen the complete crumbling of the Indian airline industry due to rampant fuel prices.

Flightglobal has put together an interesting selection of articles in case you are interested in fuel hedging.

This article from John Bowker at Reuters sets out the current state of play on airline hedging.

Flightglobal's Kerry Ezard's article sets out what airlines were doing when oil was at or around its peak of $140+ a barrel.

There are the US carriers like Southwest and United that have had to account for losses in their fuel hedge contracts.

And while oil prices have retreated, this article raises the disturbing question "Can airlines survive $200-a-barrel oil?"

As ever, when people try to second guess the market, the potential for error is huge, but the events of the past year have made the topic of fuel hedging so critical.

Deutsche Lufthansa AG said its supervisory board approved a plan to buy ailing Austrian Airlines AG. At the end of September reporting period, Lufthansa had cash and reserves of about €3.8 billion, with a nine-month net profit of €551 million.

As the global economic turmoils squeeze the airline industry, the proposed merger highlights how the relative strong airlines are gaining by consolidation. Global giants including Lufthansa, Air France-KLM, British Airways, Qantas, Delta Air Lines, Northwest Airlines, even regional heavyweights Jet Airways and Kingfisher Airlines, have been pursuing mergers, acquisitions or commercial partnerships to boost operational efficiencies and increase size.

Lufthansa, has a long reputation of being one of the most risk averse airlines in the world. However, of late, the airline has been on one of the most ambitious buying sprees anyone has seen in the world.

In 2005, it acquired Swiss International Airlines. In January this year it bought a 19% stake U.S. budget carrier JetBlue, with which it is now establishing a close marketing relationship. In August, Lufthansa agreed to buy 45% of the parent of Brussels Airlines, with whom Jet Airways has a strategic relationship. Lufthansa has said it will increase its 30% stake in British Midland Airways Ltd. to 80%. Last week, Lufthansa announced the creation of Italian subsidiary, Lufthansa Italia that will operate from Milan.

Lufthansa and Austrian are geographical neighbours and close business partners. This deal will prevent rivals like Air France-KLM gaining a foothold.

Opportunism, and fear of rivals, are the seen as the main drivers of this buying spree.

The new investments give Lufthansa footholds in diverse and far flung markets. The JetBlue deal, gives Lufthansa a strong partner in the huge New York market, while the BMI takeover, makes Lufthansa the second-largest holder of ultra-precious takeoff and landing slots at London Heathrow airport. Brussels Airlines, brings access to lucrative West African markets and a partnership with Jet Airways from India, which uses Brussels airport as its European hub.

The acquisitions also raise traffic and revenues for Lufthansa, in it's bid to close the gap with the giant Air France-KLM combine, and to have the size to compete against British Airways who is in merger talks with Spain's Iberia, Australia's Qantas, and in anti-trust requests along with U.S. giant and OneWorld partner American.

The Austrian government could approve the deal by Friday, which values the national carrier at as much as €377.4 million ($479.5 million) and save it from collapse under mounting financial woes.

Austria's privatization agency last month selected Lufthansa for exclusive negotiations to buy the state's 41.56% stake in Austrian Air. Lufthansa is now proposing to pay only €366,000 for the stake because of Austrian's financial troubles, but could pay up to €162 million more in the future, depending on the company's financial performance. Lufthansa also plans to launch a tender to buy out private shareholders for a further €215 million.

A deal would require regulatory approval, partly because the Austrian government plans to spend €500 million helping to restructure the airline. This prospective Government help, could prompt challenges from other carriers.

Industry watchers, and analysts worry that Lufthansa may be overreaching, as Swissair did back in the late 1990's, but Lufthansa has experience managing diverse companies like Lufthansa Technik, an aircraft-maintenance company, and LSG SkyChefs, one of the biggest in-flight caterers. Also, Lufthansa management is known to keep an eagle eye, both on its balance sheet and profitability. This buying spree is being conducted with the typical methodical German caution, and a focus on profits and immediate benefits.

With inputs from Deutsche Lufthansa, Bloomberg, Flightglobal, and Wall Street Journal

My good friend K.B. Syed, recommended this article as a counter balance to the Arvind Lavakere article.

It is not my intention to turn this in to a religious or ethic debate, but rather to raise awareness, on the methods, blatant and devious, used to divide us, instead of uniting us. In this regard, my respects to Mobashar Jawed Akbar.

Devesh
----------------------

M J Akbar is one of India's best-known journalists and commentators, someone with a deep insight into the Indian people and their mindset. In this first-person, as-told-to piece, Akbar discusses the Mumbai attacks and their relevance for India.

Many people forget that India is a tough nation. Toothless leaders have turned India into a soft nation. People forget that India has fought back Muslim terrorism in Kashmir; Sikh terrorism in Punjab, Christian terrorism in Nagaland and Hindu terrorism in Assam, and amongst the Naxalites .

We have had everything thrown at the Indian nation State. Still, we have stood up. The people of India have shown the courage and ability to believe in their nation and to fight back. But the completely impotent leadership of five years have turned a tough country into a soft State.

I am very sad. I keep feeling that if they protect India as they protect their leaders -- whether it is Prime Minister Manmohan Singh or Congress President Sonia Gandhi -- I think I would be safe. Today, India's leaders are safe and India is in panic.

On what India's response should be:

India's proper reaction would be possible if we understand the extent of the disease.

If the disease is cancer, you can't apply band aid. After making a complete mess of security issues for five years by asking Shivraj Patil to go finally we may have a home minister who doesn't comb his hair and change his clothes. But we want something more than that. If it is cancer, we need chemotherapy, a much more serious exercise. It needs a legislative and executive framework. It needs political mobilisation. People are numbed.

The Indian people have no leadership. You have a prime minister. Did you see him when he addressed the nation? Nobody knew if he was addressing the nation or having a cup of tea?

He looked serious, but he didn't talk to us about our anger and about our anguish. I think this administration is tone deaf to the anguish of the people. They just cannot understand what the people are going through. They just don't understand our pain or our anger. The most important thing is that, perhaps, we have politicised not only the instruments of the State like the police but we have also politicised the understanding of the nature of the problem.

I think the very first thing to do is to ensure security so that it prevents the next attack. If any attack takes place under someones job should go. Don't come to me with alibis.

On the terrorists getting local support:

I am an Indian Muslim and I am very proud of both, being an Indian and a Muslim. I do not see any contradictions. This is my land and I have nowhere else to go.

But can I say because I am an Indian Muslim that no Indian Muslim is involved? Can you, because you are a Hindu, say that no Hindu is involved? We have to behave like Indians first. Not as a Muslim or as a Hindu first. Because we need Hindu votes and Muslim votes and because this government thinks that it needs Muslim votes so it has been in complete denial.

Do you think that these people came across from Pakistan and had no support in Mumbai?

It is not possible. It was a huge operation. Ten people hit nine places and you killed nine of them. You want to say that they went from place to place? Who knows some of them must have slipped away to create new sleeper cells to hit us six months later.

They are hiding things. I would like to believe that there was an underworld connection. Because, Karachi and Mumbai are also linked by drug smuggling. The culture of criminals is aggression. It comes naturally to them. It is not easy for you and I to become aggressive, however angry we are. It does not come naturally to us. These are people who are trained psychologically in aggression. They have no respect for the State. They have no love for the country. And they have no respect for authority.

Why? Because the only face of authority is the corrupt policeman. The criminal gives money in the morning and money in the evening. Why should he have respect for somebody he gives bribes to? For the guy from the underworld his understanding of the Indian State and authority is corruption. He has no patriotism to stop him. Why would he not join hands with the terrorists? In any case, he belongs to another world. We have not even begun to address and discuss this.

On the Pakistan factor

I am tired of giving Pakistan a long rope on some excuse or the other. Everybody is saying this will happen if we do this, that will happen if we do this. Our relations with Pakistan will go, then, let them go. What has our relations with Pakistan brought us except violence and terror? Why should we be in charge of saving Pakistan? For what? Every time they turn around and they say they want evidence. Now, finally we have evidence.

I have been an editor for 35 years from the age of 23. From that time on, since the days of General Zia-ul Haq, I have been hearing 'Pakistan is asking for evidence'. We asked for withdrawal of their support to the movement for Khalistan, they said, 'Oh, we don't know anything about it.' On Kashmir, they kept repeating where is the evidence. Benazir Bhutto came, she asked for evidence. Nawaz Sharif came, he asked for evidence. I think Pervez Musharraf asked for less evidence. Now again, they are asking for evidence.

There is a terrorist in Mumbai, captured and arrested. How much more evidence do you want? If what he is saying is not evidence, then how can you get more evidence?

This government is in its 11th hour. Now they will bluff the people to protect their votes. There is no time left for them. The agony of departure will be hard from this government.

On the reaction in the West

The US and Britain have a vested interest in telling India to look within. Why? When Americans die then they can send their air force 7,000 miles and bomb every country to smithereens. But when Indians die, they tell us no, no, you must be patient. You must act like a swami and a yogi. Why? Is an American life more precious than an Indian life? Why should we keep listening to them? But we have a government that keeps listening to them all the time. We don't get tough.

The last time we got tough was after the attack on Parliament. We took some tough actions under Operation Parakram and then there was a certain lull. Three years ago, Prime Minister Manmohan Singh was able to tell President George W Bush that there are no terrorists amongst Indian Muslims. That means that lull continued.

Pakistan must be made to realise that it will have to pay a heavy price. Not necessarily through war, but a heavy price will have to be paid in loss in trade, in cancellation of orders and other engagements. They should pay a heavy price in terms of people to people relations. I am not saying you can freeze a relationship to death, but the message must go out that if there is a crime there will be a penalty. You just can't get away with it.

Let the Pakistan government cooperate with us. But look at how the Pakistan government has buckled down and we are sitting here whimpering.

They want to send some lowly officers to India. For what? Even Pakistan is treating the Manmohan Singh and Sonia Gandhi government with total contempt. They know how weak it is.

Delink Hindu-Muslim relations and Pakistan

Look, you must not confuse the Pakistan issue with the Indian Muslims issue. Their so-called alienation or their economic deprivation is not linked to the issue of Pakistan.

Indian Muslims have nothing to do with Pakistan. They have absolutely no sympathy for Pakistan. They know that Pakistan was the biggest mistake committed in the history of Indian Muslims. They know it. You can ask anyone in Baroda, Bihar or Mumbai. They know how they are suffering the backlash of all the consequences of cross-border terrorism.

Today, they fear retribution from the government, they fear retribution from popular disenchantment and anger. They feel helpless. They feel afraid.

We must understand finally that it is not so much the 'local people', it is the local underworld that is involved in anti-India activities. In 1993, who were involved in terrorism? The underworld. Why have you not done anything about it? The State turns a blind eye to the police and corruption. I don't know how many readers smoke hashish and other stuff, but I am accusing them of cross-border terrorism. Drugs come to India from Afghanistan via Karachi.

What we can do as individuals

If whoever is responsible for protecting the nation fails, then he or she should not be allowed to continue in power. That is the toughest and sharpest message we can give. You can tell that you may be a soft State, but we are a hard people and we are hard voters.

We are not going to forgive you for your lies and deception and for your waffling. How many blasts do we need to understand that? When Jaipur , Ahmedabad , Mumbai and Delhi happened no one who was genuinely guilty was caught.

We have to understand now that corruption has eaten away vitals of this nation. It is the biggest danger to the security of India. It is not just the case of some spectrum being sold to someone by some minister in. Everyone who is corrupt get out!

It Is a failure all around. We have to be extremely practical and pragmatic. There is great deal to be depressed about as an Indian. Frankly speaking, I feel very angry and upset. I am never upset by the behaviour of our enemies. I am only upset by the betrayal of those I trust.

M J Akbar, editor-in-chief, Covert magazine, spoke to Sheela Bhatt

The original article can be read here.

Airlines across the globe are grounding planes, cutting capacity and delaying or even canceling orders for new aircraft as the global economic crisis hits both passenger and cargo air traffic.

Add to this airline mergers like those of Delta-Northwest, Air France-KLM, Lufthansa-BMI, the proposed British Airways-Qantas, leading to industry consolidation, and in the worst cases even going out of business, it is a tense time to for aircraft manufacturers Airbus and Boeing. They are being forced to carefully managing their bulging order books so that delayed or canceled orders from airlines don't turn into "white tails" — jets built with nowhere to go.

Last month, Air France-KLM said it wouldn't exercise options to buy up to 15 Boeing 777 wide-body jets to help save euro1.4 billion ($1.78 billion) over the coming years. It has also indefinitely postponed a tender, scheduled for the end of this year, for long-range jets, either the Boeing 787 or the Airbus A350XWB.

Kingfisher Airlines, Iberia SA and Cathay Pacific are among other airlines that also recently announced delays or possible cancellations of their orders for Airbus and Boeing passenger and cargo aircraft, including Airbus' A380 superjumbo and Boeing's 777.

Kingfisher even dropped its ambitious plans to connect India's technology capital, Bangalore, non-stop with New York and San Francisco, which forced Airbus to divert their ordered A340-500 to Arik Air.

Lufthansa has grounded four Airbus A300-600s because of a drop in demand and is looking to do the same with three A340-300s, but so far has no plans to delay or reschedule orders.

The merger talks between British Airways PLC and Australia's Qantas Airways Ltd. also raise questions over the fate of their own orders for the Airbus A380 super jumbo. British Airways has ordered 12, Qantas has one, two on the way, and expects 17 more. A merged airline would probably manage with fewer aircraft.

Last week, the International Air Transport Association said global air traffic shrank for a second consecutive month in October and warned "the gloom continues and the situation of the industry remains critical."

When airlines cancel or delay orders for jets that weren't scheduled to be delivered for several years, the impact on the jet makers is manageable. Jets made for one airline can be sold to another relatively easily, so when one airline asks to postpone delivery of its aircraft, Airbus and Boeing can arrange to speed up delivery to another airline.

With the rapid cooling of the global economies, industry analysts believe that right now only "very gentle adjustments" have been seen, and the worst is still to come.

We can look to recent developments where BOC Aviation, the Singapore-based aircraft leasing arm of the Bank of China, arranged to buy 17 aircraft that had been ordered by U.S. carrier Skybus before it filed for bankruptcy in April.

Boeing claims no significant order deferrals of their 3,700 orders backlog, and were well positioned for the downturn. However, the impact of the recent Delta-Northwest merger, and the capacity cuts by almost all US airlines, will take their toll, sooner, not later.

The bigger worry for both Airbus and Boeing are the dreaded "white tails," jets that come off the assembly line with no waiting buyers because the airline that ordered them has canceled or gone out of business.

White tails get their name from the fact that aircraft and painted with buyers' schemes and corporate logos just before delivery.

"When airlines disappear or walk away, then there's money tied up in airplanes, and that's not a good negotiating position" for Airbus and Boeing as they try to line up new buyers, Morris said.

Airbus and Boeing both say their order backlogs are comfortably overbooked, with 675 net orders at the end of October for the European jet maker and 640 orders for Boeing as of November 25.

Smaller plane makers are also feeling the heat. ATR, a European maker of regional turboprop aircraft owned by Airbus parent company EADS NV, and Italy's Alenia Aeronautica, has taken 18 orders so far this year but is noticing some hesitation by customers. While there is demand for these smaller aircraft, the regional carriers, have more pressing demands, than fleet renewal.

With some inputs from AP

While we passengers spend tons of money on noise reduction headphones, and drive cabin crews silly with our umpteen requests for earplugs, weary Emirates Airbus A380 pilots are complaining that they cannot sleep in their crew-rest area in the aft main cabin because the aircraft is too quiet!!!

The pilots claim that the lack of engine noise in the A380's cabin means they are constantly disturbed by cabin sounds, such as crying babies, toilets flushing and cabin crew call bells.

Emirates pilots say, on other aircraft, the noise of the engines drown out the cabin noises. On the A380, even with the pilots sleeping with earplugs the cabin noise goes right through them. I wonder who their earplug vendor is. Earplugs are used by flight line personnel to drown out the engine noise from the outside, which is LOUD!!!

The Dubai-based carrier has asked Airbus for a solution that does not involve substantially adding weight. This eliminates the possibility of adding insulation to the walls of the rest area.

It appers Airbus has "exceeded" on its noise performance on the airline's Engine Alliance GP7200-powered A380s. One option could be installing lightweight noise generators.

Emirates has not opted for the standard Airbus option of locating the pilots' rest compartment behind the cockpit, as it would have compromised the design of the airline's upper deck first-class cabin. This adds to the pilots' problem as passengers mistake the rest area for a lavatory, and repeatedly pull the door handle. Emirates is the only A380 airline till date to have situated the crew-rest areas at the rear of the main deck. The alternate standard Airbus option of locating the pilots compartment in the cargo hold was rejected as "claustrophobic".

What do you think ? As usual comments are requested and welcomed.

Declaring victory, thousands of anti-government protesters in Thailand today ended their siege of country's two main airports allowing landing of the first international flight in eight days, bringing relief to over three hundred thousand stranded passengers including Indians.

Thousands of protesters came out of the Suvarnabhumi international airport in cars and trucks ending the siege prompted by the decision of country's Constitutional Court which dissolved the three parties of the ruling coalition for committing electoral fraud and barred the prime minister Somchai Wongsawat for five years from active politics.

Similar scenes were witnessed at the domestic Don Muang airport which was also held by the protesters.

The departure of the People's Alliance for Democracy (PAD) activists from the two airports ended the country's immediate crisis. The siege had severed Thailand's air links to the outside world for a week, and stranded more than 300,000 tourists.

The airport today welcomed its first commercial airliner from Thai Airways from the resort island of Phuket at 1245 IST (0715 GMT). Six Thai Airways flights are scheduled to leave Suvarnabhumi later today for New Delhi, Tokyo, Sydney, Frankfurt, Copenhagen and Seoul.

There was jubilation all around after the end of the siege with taxi drivers and Thai Airport staff welcoming the arrival of passengers from the flight.

A meeting among the three ousted parties today endorsed Deputy Prime Minister Chaowarat Chandeerakul as the caretaker prime minister.

Hamburg is cold and snowing, but it had warm news for Australian national carrier Qantas.

Two QANTAS A380s all painted up. MSN015 (F-WWSL - VH-OQB) is seen here taxiing out with MSN022 (F-WWSS - VH-OQC) in the background.


Both birds should be bound for warmer temperatures in the warm summer of Australia (in the southern hemisphere) very soon.

Tipping my hat to Jon Ostrower for the heads up.

The Smithsonian’s National Air and Space Museum announced today a gift of $6 million for Phase Two of the Steven F. Udvar-Hazy Center from Airbus Americas Inc. The gift is the largest corporate gift to the Smithsonian Institution in 2008. In recognition of the donation, the Imax Theater at the Udvar-Hazy Center will be named the Airbus Imax Theater.

“The gift represents a generous contribution from Airbus, a reliable supporter of the museum for the past decade,” museum director Gen. J.R. “Jack” Dailey said. “To come through in the current economic climate demonstrates their commitment to partnering with the National Air and Space Museum in its mission to commemorate, educate and inspire visitors by preserving and displaying aeronautical and space-flight artifacts.”

Airbus gave a separate $5 million gift in 2000 for the construction of the Udvar-Hazy Center, which opened in 2003. That construction was privately funded, completed on time and $13 million under budget.

“The Smithsonian Institution is truly global in reach—a leader in preserving culture and illuminating science and history,” said Airbus Americas Chairman T. Allan McArtor. “As a global leader ourselves in the area of aircraft manufacturing, Airbus is helping shape the future of flying. By extending our existing partnership with the National Air and Space Museum, we also are helping preserve aviation’s past in a way that cannot be duplicated anywhere else.”

Airbus Americas President and Chief Executive Officer Barry Eccleston added, “The collection of the National Air and Space Museum is the largest and most significant of its kind, including many of aviation history’s most rare and iconic artifacts. Despite the challenging economic environment globally, it’s vital that the Smithsonian’s important work of preserving, restoring and educating continues to be supported. All of us at Airbus are gratified to be playing a role in making the Udvar-Hazy Center Phase Two project—and all that it will mean to future generations—a nearer-term reality.”

The museum’s collection includes an Airbus A320 cockpit that is a key item in the museum’s “America by Air” gallery, which focuses on the history of passenger air travel.

Phase Two of the Udvar-Hazy Center will be dedicated to the behind-the-scenes care of the Smithsonian’s extraordinary collection of aircraft, spacecraft, related artifacts and archival materials. This collection is the largest and most significant of its kind, with some 60,000 artifacts, including many of history’s most rare and iconic artifacts of flight.

The completion of Phase Two will help the museum accomplish its mission to collect and preserve our nation’s aviation and space history through the objects associated with it. The new wing includes:

• Mary Baker Engen Restoration Hangar: spacious enough to accommodate several aircraft at one time with a second-floor viewing area designed to give visitors a behind-the-scenes look at work rarely seen by the public.
• Archives: the foremost collection of documentary records of the history, science and technology of aeronautics and space flight will be housed in a single location for the first time, providing researchers with ample space and equipment.
• Emil Buehler Conservation Laboratory: will provide conservators much-needed space to develop and execute specialized preservation strategies for artifacts.
• Collections Processing Unit: a dedicated loading dock and specially designed secure area for initial inspection and analysis of artifacts.

The National Air and Space Museum building on the National Mall in Washington, D.C., is located at Sixth Street and Independence Avenue S.W. The museum’s Steven F. Udvar-Hazy Center is located in Chantilly, Va., near Washington Dulles International Airport. Both facilities are open daily from 10 a.m. until 5:30 p.m. (closed Dec. 25). Admission is free, but there is a $12 fee for parking at the Udvar-Hazy Center.

Airline also gets nod from MoCA for international operations from Mumbai and Kolkata

The Ministry of Civil Aviation (MoCA) yesterday granted Kingfisher Airlines the permission to operate to eight international destinations and gave the go ahead to commence international flights from Mumbai and Kolkata. According to a report in the Times of India today, the airline has also got a nod to link more foreign cities from Bangalore. The airline currently operates a daily Bangalore-London service and has received permission for Bangalore- Dubai flight, which is yet to be launched.

“Kingfisher Airlines has received permission to connect Mumbai to London, Hong Kong and Singapore; Bangalore to Bangkok, Colombo and Male; Kolkata to Dhaka and Chittagong,” informed the official from MoCA. According to an airline official permission to operate on routes like Mumbai- Bangkok is still awaited and the time frame for launching flights to the new international destinations will be declared progressively. The airline is likely to use the A-330 aircraft for flights from Mumbai to London, Hong Kong and Singapore, while ATRs will be used on Kolkata-Dhaka and Chittagong sectors. The A-320 will be utilised for the Bangalore-Bangkok, Dubai, Colombo and Male flights. The airline is in talks with some private equity players for infusion of funds, and plans to take two more A-320s on lease for the new services.

Airbus 330 image is my copyright

Scandinavian Airlines Systems (SAS) is in talks with national carrier Air India to ink a pro-rata agreement for providing connectivity to its passengers from New Delhi to seven more domestic cities. According to a report in today’s Economic Times, SAS will also look at other areas of co-operation with Air India such as ground handling (maintenance and servicing of aircraft) and catering informed Lennart Paulsson, Director and General Manager for India, Scandinavian Airlines System (SAS).

“We are in negotiations to work out a pro-rata agreement for connectivity from seven different domestic cities to Delhi from where we operate direct flights to Copenhagen.

The locations under consideration are Pune, Mumbai, Chennai, Bangalore, Kolkata, Goa and Kochi.

The agreement will enable SAS passengers to get connectivity between these cities and Delhi,” stated Paulsson. SAS is targeting the business travellers segment in India as more Scandinavian companies are setting up shop in New Delhi and the Indian companies are looking at expanding overseas. Trade between India and the Scandinavian countries has grown 300 per cent in the past six years.

“An SAS passenger from Europe can connect to any of these cities from Delhi without having to worry about transfer details.

Similarly, an SAS passenger from any of these cities will be able to connect to any destination on the airline’s network without having to handle separate confirmations and baggage transfers,” informed Paulsson.

SAS, which announced its foray into India last month after it suspended its operations in 2002, currently operates three direct flights a week between New Delhi and Copenhagen. The airline is the national carrier for Sweden, Norway and Denmark, and does not operate flights from any other Indian city.

SAS currently provides domestic connectivity through a tie-up with Jet Airways. However, it felt that Jet is in competition to SAS as it operates flights to London as well as Brussels from where connectivity to the Scandinavian countries is good.

Air India also operates flights to Europe, but SAS felt that the Indian national carrier is a natural ally since it is slated to join the Star Alliance which has the Scandinavian airline as one of the founder members. Air India is already in talks to becoming the 22nd member of the Star Alliance.

Dr. Vijay Mallya spoke to Business Today magazine. Excerpts from that interview. The original article can be read here.
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Can the ‘King of Good Times’ survive the turbulence in the current aviation downturn? In an exclusive interview that started well past midnight and continued for over two hours at his residence on Delhi’s tony Sardar Patel Marg, Mallya shed light on what has been dragging Kingfisher down and how he will get the airline flying high again. Excerpts:

Vijay Mallya

How do you see the aviation business panning out in the current environment?
In India air traffic is vital; it is not an option. Given the geographic size of our country and the GDP growth, aviation will always have a bright future. There is no dearth of demand. It all depends on what you are comparing (today’s situation) with. If you are comparing today’s position with the 30 per cent CAGR (compounded annual growth rate) of the last three years, you are making a fundamental mistake. A 30 per cent CAGR is not sustainable in any industry. We have reached a new level based on that growth. The whole base has moved up from 14 million to 45 million passengers; 30 per cent on 14 million is hell of a difference from 5 per cent on 45 million. That’s on one side. On the other, many airlines added a lot of capacity. Captain Gopinath (Non-Executive Vice Chairman of Kingfisher Airlines), who at every opportunity likes to criticise the way I run Kingfisher, says prices should be rock-bottom in order to stimulate demand. He talks about this country requiring 1 billion seats. I have never believed in that business model.

So, where do you see the problem?
Growth has slowed due to a multiplicity of factors. The growth of civil aviation is normally twice that of GDP growth. Even if there is a 6 per cent GDP growth, aviation will grow 12 per cent. The airport charges are too high. The industry is overtaxed. If you see Hyderabad, the fuel price, after a 4 per cent sales tax, is Rs 35,662 (per kilolitre), while the same in Bangalore costs Rs 41,285 after a 28 per cent tax. You tax any industry at 25-30 per cent, and figure out for yourself whether that industry has any chance of survival. To me, it is like a guillotine. Look at what state governments are earning: Andhra Pradesh earns Rs 1,371 (per kl) while others earn an average of Rs 9,000 in taxes. This is at today’s fuel prices, which are one-third of what they were six months ago. That’s the reason for our dues to the oil companies going out of control.

The government has reduced tax on lighter aircraft…
In its last Budget, the (Union) government was pleased to say aircraft under 40 tonnes max take-off weight will have a 4 per cent tax (declared goods). But those heavier than 40 tonnes have this punitive (sales) tax. So effectively, you are taxing Boeings and Airbuses. The so-called airports to which the government wanted to encourage connectivity, in the past, had turboprops landing there. Airbuses and Boeings are landing there today. They are connecting rural India. That’s why Kingfisher alone has suffered a burden of Rs 750 crore. If the government can amend the law, bringing ATF (aviation turbine fuel) under declared goods, every airline will go from red ink to black ink. And I have committed (that) we will lower prices to stimulate the earlier demand.

That will help wipe out your losses?
In three years, we can wipe out all the losses (estimated at Rs 2,500 crore). In India, we are performing a vital national service. Kingfisher connects 69 destinations daily with 450 plus flights. There are several places where only Kingfisher operates such as Dehradun, the capital of Uttaranchal. I am the world’s largest operator of ATRs. We ordered and got these aircraft to serve a very specific purpose. Today, you cannot go and buy 20 ATRs. You will get delivery only after 2012. There is a severe shortage worldwide of ATR pilots; 90 per cent of my ATR commanders are expats. Giovanni Bisignani (Chairman of the International Air Transport Association or IATA, a global airline body) has said India is among the most expensive places on the planet to buy ATF. We are among the lowest-cost operators of an airline in India today. We run an efficient operation. You can be as operationally efficient as you want. But you cannot fight a punitive tax.

But now that crude prices have come down, the taxes would not be hurting you as much as before…
Why cannot the tax be the same for all aircraft? Andhra Pradesh has done it; Kerala has done it. Andhra is recovering much more revenue because we are all fuelling in AP. We are carrying fuel out of Hyderabad to avoid fuelling in Mumbai. What I am asking is to be treated fairly. Oil prices have come down, but what about the 25 per cent depreciation in the rupee? We pay maintenance cost in dollars. Where has my cost gone down? Costs have gone up in lease rentals and maintenance. That is why we need this declared goods status (on ATF).

So, is the industry still unviable in spite of low oil prices?
It is not the question of being unviable. Thankfully, because oil prices have come down we will breakeven. Some people make the mistake of classifying all airlines as one. Please give us a break. IndiGo, Spice and Paramount have less than 20 planes. Jet Airways and Kingfisher fly 85 plus aircraft each— 170 aircraft between the two of us. The comparison is like chalk and cheese. As a result of tax, we have no choice, but to increase our fuel surcharge. Today, fuel surcharge is more than the basic airfare. We (Kingfisher) still have a 10 per cent overcapacity situation in India. My plan is to use same Airbus that fly domestic to fly neighbouring destinations outside India where costs are lower and yields are higher.

How important is it for Kingfisher to get foreign direct investment (FDI)?
Aviation requires a level playing field in tax and in policy. We are discriminated against both in tax and in policy. Give us a level playing field. We are capable of fighting international carriers. How does it feel to you as an Indian when 75 per cent of all traffic in and out of India is controlled by foreign airlines? This is the only country in the world that has three designated carriers—Kingfisher, Jet and Air India. It is our money, our taxpayer money, our India money. I would like to see it reverse. I would like to see Jet, Kingfisher and Air India have 75 per cent of traffic and others 25 per cent of business, like anywhere else in the world. I have applied to government to review the policy (currently no foreign airline is permitted to invest in the aviation sector). I am entitled to go to the government. If you can have 100 per cent FDI in airports or steel, what is wrong in an airline (getting foreign investment)? Who can appreciate the value of an airline in a growing market like in India more than a foreign airline? Any airline will value another airline much, much higher (than perhaps a financial investor would).

So, you are keen to have a partner?
It is not a question of partners. If today you want to raise serious capital for doing anything, a strategic investor would give you a far better value than a normal non-strategic investor would, particularly in this environment of a meltdown. Companies, in today’s bearish scene, are undervalued by up to 80 per cent. A strategic investor thinking long term is likely to value your business far higher than a normal stock market investor. If we are given a level playing field, Kingfisher will become a positive contributor to UB Group. We can make huge money if we are not penalised.

There is considerable debt on Kingfisher’s balance sheet...
There is balance sheet debt. Who does not have debt? It is not the question of debt. The banks would not have sanctioned debt if they had felt uncomfortable. Why do I need more (money)? If the conclusion is that I require huge sums of money, I disagree with that. It is a misnomer to think that we have a requirement of humungous amount of cash. We have a very healthy cash flow due to healthy sales. We are collecting Rs 475 crore a month in revenues. Our exp enditure has been Rs 480 crore, as of now. In August, it had reached up to Rs 540 crore when crude was at its peak. How did you manage with this gap between income and expenditure? Very simple. We ran up dues to oil companies. It’s simple mathematics, no rocket science. That is why our outstanding went up. We have cleared some dues to both the Airport Authority of India (AAI) and oil companies. The media’s focus has been on these (dues). Today when I run my airline, first I have to report to the media, then to my shareholders. My shareholders ask me why is it that they have to read everything in the media.

So, what happens to your aircraft acquisition plan amidst the current environment?
Gopinath had ordered 60 Airbuses and I had 30, of which I took delivery of only 10, and plan to reschedule the entire lot, but I will make money in the process. We have offers from airlines to buy our slots. They don’t appear in any balance sheet. These slots are valuable. We are arguably the only airline to have slots in 2009, 2010 and 2011. Today, if anyone wants to buy an A320, he will get delivery only post-2012. I don’t plan to take delivery of any aircraft till late-2009 in a best-case scenario.

But is there a demand globally?
The whole world is not collapsing. Maybe there is significant overcapacity in the US. You are all aware Emirates is taking delivery of almost 60 Airbus A380s and they have not said they are cancelling or deferring orders. We have returned planes and lessors have happily taken planes without any penalty. All have taken aircraft with amicable termination and no penalty. There are airlines in the world who still want capacity. Airbus cannot produce and sell Airbus 320 between 2009 and 2011 for anybody who orders them now. I am not saying I am the only seller. But certainly I have amongst the most number of slots, all of which are valuable.

Do you think you will need to buy more aircraft in 2009?
It all depends on how the industry pans out. If the government is inclined to pass the declared goods order, we will reduce prices, demand will get stimulated and more aircraft will be required.

There have been allegations that your alliance with Jet amounts to a monopoly... do you see this relationship ending in an
acquisition?
The alliance was very important for both Jet and Kingfisher. I have already received an MRTPC (Monopolies and Restrictive Trade Practices Commission) notice for announcing the alliance. Jet is 80 per cent owned by (Naresh) Goyal, and Kingfisher is owned 65 per cent by UB. Both airlines together are 60 per cent of the market. So, any equity deal will not pass muster. Let us not go down tracks that are inconceivable. That does not mean you cannot cooperate... we both have resolved to maintain our competitive advantages and brand identities. We won’t surrender our brand identities.

You have had a couple of expat Chief Operating Officers in the past. Any plans to hire a CEO for Kingfisher, given your busy schedule?
You are right now talking to the CEO. To operate an airline business in India, please tell me how many expat CEOs will survive. I have three Executive Vice Presidents who are people of great confidence and capability. What is a CEO going to do? He is required to lead the team. Even when we have not had a CEO, the team is performing remarkably well; I am proud of them. Today, it is a cakewalk as compared to what it was four months ago.

What synergies has Kingfisher achieved post-merger with Deccan?
The cost synergies achieved have been to the tune of Rs 30-35 crore per month due to discounts from various agencies that we buy our products and services from. We have allocated more metro flights to Kingfisher, and shifted more of nonmetro routes to Kingfisher Red (which Deccan has been now rechristened). My good friend Gopinath keeps saying that when Deccan was under his command, revenues were higher, and they’re now lower under Kingfisher. This is his general allegation against me. Between April and October, revenues are up by 25 per cent in spite of lower capacity deployment. In absolute terms, revenues (of the merged entity) are up from Rs 2,300 crore last year to Rs 2,900 crore this year.

Captain Gopinath has offered to buy back Deccan...
He has to buy the whole of Kingfisher. Deccan does not exist anymore. That is more of a joke.