Ten days ago, on March 3rd, Gulf Air received the first of the four Boeing 777-300ER (VT-JEG) aircraft leased from Jet Airways. Two more aircraft are expected to join the Gulf Air fleet later this month while the fourth one will join in May.

The 312 seat uber-luxurious Jet Airways Boeing's are well known. See a photo gallery of the interiors here.


Photographer Antony Best caught VT-JEG painted in the Gulf Air livery at London's Heathrow airport early in the morning of March 12th. Please note the image above is copyright of A.J. Best. Bangalore Aviation has taken permission for its use, my thanks to Mr. Best. Use this image only after obtaining permission of Mr. Best.

Skyliners has a similar image here. User Allan has an image, but the registration number appears to be doctored. The aircraft still retains its Indian registration VT-JEG.

I find the Gulf Air livery one of the most beautiful in the world. What is your opinion ? Share a comment.

..... Continued from yesterday. Read the first part.

Financials
For the third quarter ended December 31, 2008, SpiceJet declared a profit of Rs. 19.48 million. In today's economic meltdown, any profit is welcome.

The financial statements have an explanation for a one time charge of Rs. 187.82 million.

The Company entered into a Memorandum of Settlement (MoS) on November 26, 2008 with its erstwhile promoter S K Modi Group to settle various ongoing litigations with them. This settlement was approved by the Hon'ble High Court of Delhi on January 16, 2009. This settlement has resulted in one time nonoperational loss of Rs.188 million in the current quarter, shown under Extraordinary items, after adjusting for 8 million shares received by the Company pursuant to the settlement, valued for this adjustment at market rate as on the date of approval by the Hon’ble Court. Consequent to above settlement, qualifications in the audit report dated June 30, 2008 on accounts for the year ended March 31, 2008 pertaining to matters explained in paragraph 3.1, 3.5, 3.6 and 3.7 of schedule XVII of the accounts stands resolved. In respect of qualification pertaining to unaccrued interest as further explained in the paragraph 3.3 of schedule XVII of the accounts, the amount of unaccrued interest stands reduced to Rs.73.28 million. Had it been considered for accounting purposes, the loss reported for the period would have increased to Rs.252.92 million and the accumulated loss would have increased to Rs. 8,595.15 million

Thanks to gently recovering performance as outlined in part 1 of this article, and the $100 million cash injection by Wilbur Ross last year, SpiceJet has adequate cash.

Unlike most of its competitors, it is current to all the Oil Marketing Companies (Indian Oil, Bharat Petroleum, Hindustan Petroleum, etc.), airport operators, and lessors Babcock & Brown, GECAS, and ILFS.

For an in-depth look at the quarterly results and other financial information, please visit MoneyControl.

The future
Sanjay Aggarwal expects the downturn to last at least another 12 months, with recovery expected only by mid 2010. From the recent developments in world financial markets, IATA reports, and reports of precipitous drops in industrial output, one could venture to think, even that date is highly optimistic.

SpiceJet will not undertake fuel hedging for now. Sanjay expects oil to remain in the $30~$40 band till June 2009, and depending on the economic recovery $65~$70 in the first quarter of 2010.



SpiceJet will continue its cost cutting efforts which includes the phasing out of the expatriate pilots. The Indian Directorate General of Civil Aviation (DGCA) has set a deadline of June 2010 for all Indian carriers to eliminate expatriate flight crew positions, and Sanjay Aggarwal is confident of SpiceJet meeting that date.

International operations
SpiceJet will be completing its mandatory five year minimum shortly and will explore international operations as soon as fleet capacity and market conditions permit. The airline will restrict itself to ASEAN and the middle-east in line with its Boeing 737 fleet, and there are no plans for the far east, Europe or North America as of now. I can only hope SpiceJet draws inspiration from Air Asia X.

Consolidation
As widely reported in the papers, Mr. Aggarwal feels the Indian LCC (low cost carrier) market is overcrowded with the current five airlines. He expects consolidation.

Speculation is also fuelled by the appointment of Wilbur Ross and Ranjeet Nabha as Directors of SpiceJet, which should strengthen its relations with its investor WL Ross. Should the Government of India ever decide listen to IATA and open up the airline sector to foreign investment, SpiceJet is well placed to benefit from its WL Ross relationship.

SpiceJet is not actively seeking, but will explore consolidation opportunities (both to acquired and to be acquired) if a good deal comes its way. I quizzed him on the fact that other than JetLite (formerly Air Sahara), all other LCCs operated Airbus fleets and how would this affect the SpiceJet mantra of a single aircraft type.

Sanjay Aggarwal feels that once a critical mass of about 20 aircraft is achieved the costs can be justified in operating two different manufacturer fleets.

I however doubt that either Jet would like to part with JetLite, after having paid such a high premium when it acquired Air Sahara. IndiGo is a strong competitor, flies much the same routes and have the same base of New Delhi as SpiceJet, may not offer synergies. Air Deccan has now been fully merged with Kingfisher Airlines, and I do not see Dr. Vijay Mallya parting with his beloved airline. That leaves only the puny Go Air (market share 2.4 per cent). The recently reported meeting between Jeh Wadia of Go Air and Sanjay Aggarwal, may be a step in that direction. However, with only four or five aircraft (best estimate since the Go Air website is silent on their fleet size), I do not see how the "critical mass" is achieved, but there may be other benefits to justify the deal.

The soft spoken, often enigmatic, and very elusive Sanjay Aggarwal is going to need every one of his 17 years of aviation industry experience to see SpiceJet through the next 18 months, which by any measure will be the toughest for any airline. However, all industry observers say, SpiceJet appears to have the best person for the job, already on the job.

Following two engine thrust rollback events on Boeing 777 aircraft powered by Rolls-Royce engines, the United States National Transportation Safety Board (NTSB) issued an urgent safety recommendation today calling for the redesign of a Rolls- Royce engine component.

The Safety Board also recommended that, after the redesign is completed, the new system be installed on all affected B-777 airplanes at the next maintenance check or within six months.

These recommendations are being issued in response to the findings in two investigations, one accident and one incident, involving engine thrust rollbacks on Boeing 777-200ER airplanes powered by the Rolls-Royce RB211 Trent 800 Series engines.

In both cases a build-up of ice (from water normally present in all jet fuel) on the fuel/oil heat exchanger (FOHE) restricted the flow of fuel to the engine, resulting in an un-commanded engine rollback.

The first event, which is still being investigated by the UK's Air Accidents Investigation Branch (AAIB), occurred on January 17, 2008, when a British Airways Boeing 777 experienced a dual engine rollback on final approach and crashed short of the runway at London's Heathrow International Airport. One passenger was seriously injured, eight passengers and four of the flight crew sustained minor injuries; the airplane was substantially damaged.

The second event occurred on November 26, 2008, when a Delta Air Lines Boeing 777 experienced a single engine rollback during cruise flight over Montana while en route from Shanghai to Atlanta. Normal operations resumed after the flight crew followed Boeing's published procedure to recover engine performance; the airplane landed safely in Atlanta.

Testing in support of the UK accident investigation led Boeing to develop procedures to help prevent ice accumulation, and to recover thrust in cases of ice blockage. As more information from the Delta rollback event was developed, Boeing modified the procedures, which became the basis of an airworthiness directive issued by the Federal Aviation Administration.

While the procedures may reduce the risk of a rollback in one or both engines due to FOHE ice blockage, they add complexity to flight crew operations, and the level of risk reduction is not well established. And because the recovery procedure requires a descent, the aircraft may be exposed to other risks such as rising terrain or hazardous weather, or the inability to achieve maximum thrust during a critical phase of flight, such as during a missed approach.

Because of these hazards, the Safety Board has determined that the only acceptable solution to this safety vulnerability is a redesigned FOHE that would eliminate the potential of ice build-up. On February 23, 2009, Rolls-Royce indicated that a redesign of the FOHE was underway, and that they anticipated the redesign to be tested, certified and ready for installation within 12 months.

NTSB Acting Chairman Mark V. Rosenker said

"With two of these rollback events occurring within a year, we believe that there is a high probability of something similar happening again," "We are encouraged to see that Rolls-Royce is already working on a redesign, and we are confident that with the FAA and EASA (European Aviation Safety Agency) overseeing the process, this flight safety issue - even one as complex as this - will be successfully and expeditiously resolved."

The NTSB has made the following two recommendations to both the Federal Aviation Administration and the European Aviation Safety Agency:

• Require that Rolls-Royce redesign the RB211 Trent 800 series engine fuel/oil heat exchanger (FOHE) such that ice accumulation on the face of the FOHE will not restrict fuel flow to the extent that the ability to achieve commanded thrust is reduced.
• Once the fuel/oil heat exchanger (FOHE) is redesigned and approved by certification authorities, require that operators of Boeing 777-200 airplanes powered by Rolls Royce RB211 Trent 800 series engines install the redesigned FOHE at the next scheduled maintenance opportunity or within 6 months after the revised FOHE design has been certificated, whichever comes first.

Download copies of the safety recommendation letter :

• to the Federal Aviation Administration
• European Aviation Safety Agency