British Airways released it performance figures for January 2009. In the month, passenger capacity, measured in Available Seat Kilometres (ASKs), was 2.6 per cent below January 2008. Traffic, measured in Revenue Passenger Kilometres (RPKs), fell by 1.3 per cent. This resulted in a passenger load factor increase of 1 per cent, to 73.2 per cent.

Reflecting the deepening impact of the recession and cost cutting by passengers, premium traffic (first and business class) dropped 13.7 per cent compared to a 1.4 per cent rise in non-premium traffic. A direct barometer of industrial manufacturing ouput, cargo performance, measured in Freight Tonne Kilometres (FTKs), fell by 16.7 per cent, which should be a cause of concern to all of us, as even post 9/11, when global airline fleets were grounded, cargo output fell only 13.7 per cent. It appears global manufacturing has just stopped, because we consumers have stopped buying.

We have to fight the "FUD factor" (Fear Uncertainity, Doubt).

Also, British Airways has re-cast its financial performance and restated it performance for the 9 months ending December 31, 2008

• Operating profit of £89 million (2007: £744 million - restated) down 88 per cent
• Loss before tax of £70 million (2007: Profit £816 million - restated)
• Revenue £7,046 million (2007: £6,634 million - restated) up 6.2 per cent
• Passenger revenue at £6.2 billion was up 6.6 per cent
• Cargo revenue at £537 million up 18.8 per cent, before the recession kicked in
  
• Cargo performance, (measured in FTKs) down 1.7 per cent primarily due to effects in last quarter of 2008
  
• Passenger Capacity (measured in ASKs) up 0.2 per cent
• Passenger seat factor 78.4 per cent down 2.3 per cent
• Fuel costs £2,244 million up 48.4 per cent

Cash at the end of December was £1.6 billion, £278 million lower than at March 2008. Net debt was £2.2 billion, up £0.9 billion since the year end, £0.6 billion of this increase due to exchange.

British Airways has responded by adding more discounted fares to its World Offers sale for travel between January and September 2009 with reductions on a range of longhaul destinations including New York, Cape Town and Grand Cayman and shorthaul destinations including Paris, Venice, Milan, Vienna and Prague.

Statements from British Airways clearly indicate the airline is looking at the medium to long term.

The new Club World longhaul cabin has been fitted on 19 of 42 Boeing 777s in addition to all 57 of Boeing 747s. The fitments will be completed by the end of 2009.

For shorthaul passengers, Club Europe will be in a new configuration to guarantee a window or aisle seat from February 23, 2009, with the removal of the use of the middle seat.

Fitments of the new First class cabin will start later this year and will added to the pending Boeing 777-300s due for delivery in 2010.

SCARY!!!!, there is no other word to describe the performance numbers and the forecast from IATA, the association representing 93% of the global commercial air transport industry.

For the month of December, it is now official -- ALL regions of the world, have reported major declines in cargo performance in December 2008 when compared to December 2007. Across the globe, air cargo, a vital barometer of world trade, is down 22.6%.

In November, Africa was the sole region showing positive compared to a year ago. Again, the Asia Pacific region, which represents 45% of global air cargo, led the world with a whopping 26% fall, when compared to December a year ago, this on top of 16.9% decline in November.

As per Giovanni Bisignani, IATA’s Director General and CEO

“The 22.6% free fall in global cargo is unprecedented and shocking. There is no clearer description of the slowdown in world trade. Even in September 2001, when much of the global fleet was grounded [post the 9/11 terror attacks on New York city], the decline was only 13.9%,”

The year on year performance does not reflect the oncoming tsunami of collapsing world commerce and trade. On an annual basis air cargo is down 4% with Latin America leading the world down 13.5%. Asia Pacific is down 6.6%.


Those of us, hoping for a global recovery in 2009, data from the Economist Intelligence Unit (EIU) and IATA, shatter those hopes. Business and consumer confidence are at historic lows. Leaders at the World Economic Forum meeting at Davos are talking about a mind numbing 0.5% growth for 2009. While India and China will experience moderate growth of around 6%, the recession in the developed economies will ensure the global recovery will commence only in 2010.



Semiconductors shipments are one the highest users of air cargo and a key barometer in global electronics production. The shipment performance of the global semiconductor industry reflects the deepening impact of the global recession.


Across the globe, the aviation market have been hit, and hit hard. Revenue Passenger Kilometers (RPKs) are down, and Freight Tonne Kilometers (FTKs) are way down.


Airlines have been retiring or parking their aircraft in record numbers. The silver lining in this saga, is that airlines, mostly in the middle east, have been taking deliveries of new more fuel-efficient aircraft, and refreshing their fleet to cut down operating costs.


Airlines across the world are facing deepening losses, and I am sure we are going to see the many airlines and brands simply disappear during 2009. US airlines were smart and cut their capacity ahead of the drop in demand, unlike airlines in other regions. This will aid them in returning to profitability sooner.


The bad news is going to continue in 2009. Passenger markets are expect to decline another 3%, which freight will decline another 5%.


Part of this precipitous drop in global trade is due to the "FUD Factor". Fear Uncertainty and Doubt. Every procurement manager, and individual consumer has retreated in to a shell. Stop all purchases. Buy only the bare minimum. This has slammed the brakes on the global economy so hard, that there is hurt everywhere.

Life is going to be difficult, but the world is still here. Caution is needed, but so is pragmatism. Surely there is no need to retreat so hard, and withdraw so deep.

As the world emerges from this shell, and consumption re-starts, the shelves are going to be bare, as existing inventories would have been fully consumed, and capacity cuts in manufacturing will be take supply well below demand. At that point air cargo will increase with a vengeance.

British Airways today, reported its performance for December 2008. The airline's performance is in line with IATA's November 2008 report, which highlights a deepening of the global economic slowdown.

Capacity declines are in line with actual performance. Compared to December 2007, passenger capacity, measured in Available Seat Kilometres (ASK), was down 3 percent, Actual passenger performance, measured in Revenue Passenger Kilometres (RPK), fell by 3.4 per cent, passenger load factor decreased by 0.2 per cent to 76.7 per cent.

It also appears that corporate passengers are belt tightening, and moving to the back of the plane. Premium passenger traffic (first and business class) decreased by 12.1 per cent while economy decreased by a comparatively modest 1.7 per cent.

The alarming fall, which highlights economic slowdown, is in cargo performance, measured in Freight Tonne Kilometres (FTK), fell by 14.3 per cent.

Globally air cargo transports about 35 per cent to 40 per cent of global trade, by value. Globally, air cargo FTK fell by 13.5 per cent in November 2008, when compared to a year ago. The December fall by British Airways, highlight the continuing and rapid decline of global trade, and deepening of the already significant economic slowdown.

2009 will see economies become a lot worse before improving.

The recently announced results by The International Air Transport Association (IATA), is nothing short of shocking.

International air cargo is down by a whopping 13.5 per cent in November when compared to November 2007, and passenger growth is down by 4.6 per cent.

Graph legend
RPK - Revenue Passenger Kilometres (sales)
ASK - Available Seat Kilometres (capacity)
FTK - Freight Ton Kilometres (sales)
ATK - Available Ton Kilometres (capacity)


Even for year to date comparisons January to November between 2008 and 2007, global air cargo is down 2.2 per cent


Globally air cargo transports about 35 per cent to 40 per cent of global trade, by value. The negative growth in air cargo clearly shows the rapid fall in global trade, and the broadening impact of the deepening economic slowdown.

Even the middle east, the region showing consistent growth, slipped in to negative territory at -1.6 per cent. The largest air freight zone, Asia Pacific, which contributes 44.6 per cent to global air freight, contracted by the largest -16.90 per cent. Capacity cuts of 1 per cent in passenger and 3.7 per cent in cargo, could not keep up with the rapid declines.

India
As per data from the Airports Authority of India, available till October 2008; India year-to-date passenger performance is significantly worse than the rest of Asia Pacific and global performance. Passenger growth is down to -3.4 per cent vs. -0.8 per cent (Asia Pacific) and +2.2 per cent global.

However on the freight front, India has a Y-T-D growth of 4.2 per cent based on actual tonnage, compared to -4.7 per cent in Asia Pacific and -2.2 per cent globally.


Bangalore
For some unexplainable reason, Bangalore's performance is way below the national standard, at -14.8 per cent and -5.3 per cent for monthly passenger and freight performance, and -8 per cent and -7 per cent for year to date passenger and freight performance.

Highlights of the IATA report :

International Passenger Traffic

• The November passenger decline of 4.6% is a considerable worsening from both the 1.3% demand contraction in October and the 2.9% fall in September.
• Asia-Pacific carriers face the most difficult operating environment with a 9.7% decline in November, following a 6.1% contraction in October. The region also had the most aggressive capacity cuts at -5.1%. While Chinese domestic traffic rebounded after the Olympics, travel to and from international markets continues to decline, reflecting the weakness in both global trade and consumer confidence.
• North American carriers saw international traffic decline by 4.8% - the second largest drop among the regions. Until August, the region’s carriers had been shifting capacity to international markets. With the near collapse of the investment banking sector and consequent reductions in business travel, North Atlantic travel slumped. Carriers have started to cut international capacity with a 0.8% drop in November (following 0.4% growth in October)
• European carriers saw international traffic drop by 3.4% as all the region’s major markets (intra-Europe, North Atlantic, and Asia) slumped.
• Smaller emerging markets fared better. African carriers saw traffic decline by 1.6%. This is a considerable improvement from the 12.9% drop in October, resulting from stronger intra-African traffic. Middle Eastern carriers saw traffic increase by 5.6%. This is up from 3.5% growth in October, but represents a step-change from the double-digit expansion that characterized growth prior to the current financial crisis. Latin American carriers saw a slight decline in growth to 3.3% (compared to 4.5% growth in October), buoyed by the region’s positive, albeit slower, economic growth.

International Freight Traffic

• Asia-Pacific carriers (representing 44.6% of global freight) saw freight traffic fall by 16.9% in November - the largest decline of any region. As freight accounts for a larger percentage of revenues for the Asia-Pacific carriers, fourth quarter profits for the region’s carriers will be disproportionately (and negatively) impacted by the downturn in the global air freight market.
• Double-digit freight declines were also experienced by Latin American carriers (-15.7%), North American carriers (-14.4%) and European carriers (-11.0%). Freight traffic for Middle Eastern carriers turned negative (-1.6%), following 1.0% growth in October. African carriers, while being the only region posting freight growth (2.2%), saw a decline from the 3.0% growth posted in October. Plummeting business confidence and the continuing turmoil in financial markets indicates that the worsening trend will be continued in December.

Giovanni Bisignani, IATA’s Director General and CEO said

“The industry is now shrinking by all measures. The 1.0% capacity cut in international passenger markets in November could not keep pace with the 4.6% fall in passenger demand. We can expect deep losses in the fourth quarter,”

“With no end in sight for the worsening global economy, the 2008 gloom will carry over into the new year. Relief in the oil price has been outstripped by the falls in demand and capacity cuts are not keeping pace. The industry is back in intensive care. Improving efficiency everywhere will be theme for 2009,”

While the end to the global economic slowdown is still much further away than expected, the freight performance in India, shows us, the Indian economy is still performing well. We have to defeat the FUD Factor (Fear Uncertainty Doubt) that is in our minds.

Reuters is reporting that Australia's competition watchdog, the Australian Competition and Consumer Commission, sued the cargo unit of Singapore Airlines on allegations they were involved in international price-fixing. The commission has already taken action against Qantas Airways and British Airways, who paid fines totaling $17.1 million.

The commission accused Singapore Airlines Cargo, of entering into arrangements with other carriers to fix the price of a fuel surcharge and a security surcharge between 2001 and 2005. The penalties and costs, are still unspecified.

SIA Cargo spokesperson informed that the airline will defend the allegations, and re-iterated their commitment to competing fairly and within constraints of the law.

Since February 2006, regulators worldwide, have been probing more than 30 airlines over the issue of cartelisation, after U.S. and European officials raided airlines as part of investigations into the imposition of fuel surcharges in international air cargo.

As per PTI, as part of the ongoing initiatives to enhance Bengaluru International Airport's (BIA) infrastructure, a cargo village, the first of its kind, was inaugurated at the airport on Monday.

The facility, built at a cost of Rs 12 crore and completed in 10 months, would house 120 freight forwarders and 80 custom house agents, a release said.

The cargo village boasts of essential facilities for warehouse, such as banks, conference rooms, business centre help desk, staff canteen and parking facilities for 80 trucks.

Spread over 11 acres of land with adequate provision for future expansion facility, the cargo village located near the cargo terminal is expected to strengthen the city's position as a trade and commercial hub while ensuring faster clearance of import and export consignments from the cargo terminals at the airport, it said.

BIAL's current facilities included two operational cargo terminals, built and operated by Menzies Aviation-Bobba ,and Air India-SATS Joint Venture. The former has initial capacity to handle 150.000 metric tons for cargo while the later has two-floor warehouse with capacity of 200,000 metric tons.

Till date the airport has handled 70,905 tons of cargo. Bangalore's current annual cargo requirement stands at 170,000 tons, the release said.

Bengaluru International Airport announced the completion of six months of airport operations. The new greenfield airport opened on 24-May-08.

80% of the aircrafts departed on time with 15 mins tolerance, as per the internationally accepted norms. Average wait time for delivery of the first baggage on the arrival belt being 9 minutes for domestic and 13 minutes for international arrivals. Average queue time at check-in is 10 minutes, at security check it is 7 minutes, at arrival immigration it is 15 minutes and at departure immigration it is just 7 minutes.

Albert Brunner, CEO of BIAL shared data, facts and figures with the media. He said, “The passenger today is evolved with his travel to other international airports. The performance at an airport is measured in terms of the time taken for each process and his quick entry and exit from the airport. We are glad to have established the success of this six month young airport with data supporting its operational efficiency.”

Bengaluru International Airport Traffic

The airport began operations with 170 flights per day in May-08, it ended the summer ‘08 season with 162 flights per day. For the winter ’08, flights increased to 165 per day resulting in a growth of 1.5%. Although the domestic air traffic reflects a decline of 1.5%, this overall positive growth is due to the increased international flight operations from Bangalore further establishing the many promises that the city holds. Compared to the summer season, the airport will see a 23% growth in international movements.

The last six months have seen the introduction of six new international air carriers into Bangalore, making more global destinations directly accessible to air travelers. These include Dragon Air, Tiger Airways, Oman Air, Air Mauritius and most recently Indian carriers - Kingfisher Airlines and Jet Airways. This increase is largely due to the city’s attractive air traffic passenger profile and the increased capacity of the new airport.

The total increase in international flights during the winter schedule is over 160% as compared to last year’s winter schedule. New flights and sectors from our Bengaluru International Airport also includes Indian Airlines to Abu Dhabi which commenced operations from 27-Oct-08. Additionally, Transmile (freighter ) will begin operations to Malaysia (Kuala Lumpur - Subang).

New additions at the terminal

Bengaluru International Airport recently opened its Reserved Lounge that caters to high profile and important travelers such as MLAs, MPs, Chief Secretaries, visiting dignitaries and high profile executives. The lounge also houses an office for the State Intelligence and is operational 24/7. The other lounges in the terminal building include the Oberoi, Kingfisher and BIAL operated lounge - Cafe Net at the domestic departures. In addition, the VVIP terminal on the airside also has a lounge. The airport is readying to add the Indian (IC) lounge, soon to open, to its list of lounges, built on par with international standards.

My personal observations

• Congratulations to the BIAL team for completing 6 months. The airport is coming along nicely on the passenger front. The cargo terminal operators are doing a good to decent job, and operations are stabilising at AI-SATS and good at Menzies.

But....................

• The whole focus of BIAL is still only on passengers. Its time for their focus to include "Non passenger" business visitors', whose needs are still ignored. The air cargo operations contributes about 30% of airport revenue to BIAL, and is critical for most industries.
• There is no parking, no proper security or traffic control in the service roads near the service areas like flight kitchens, cargo terminals, airline offices, etc.
  
• There are almost 5,000 employees at the airport, and an additional 1,000+ of business providers like cargo agents and customs agents. Many of these staff, want to use the Vayu Vajra and Suvarna bus services, to reduce transport cost and travel in greater comfort. BMTC has an excellent monthly pass, but they are unable to use it, as these buses only can stop at the main parking.
  
• There is no shuttle bus service INSIDE the airport which can link long term parking with the passenger terminal building, or the main. Inside the airport premises is BIAL responsibility and they have to fulfil it.
• The cargo village is still not delivered. The airlines' offices building is still not delivered.
• There is no official, active involvement with industry, the primary customer of the airport.
  

I can only exhort BIAL to improve in these areas of shortcoming. Time to make BIA from good to great.

Back in June, I led a high level delegation of industries on a visit of the air cargo facilities run by Menzies Aviation Bobba Group, and Air India Singapore Airport Terminal Services at Bengaluru International Airport. (Read that article).

We observed that the Indian Customs Authority did not have a full presence at BIAL airport, despite earlier assurances to Industry in March 2008. To correct the situation, the Bangalore Chamber of Industry and Commerce (BCIC), made a representation to the local Customs office as well as to the Chairman of the Central Board of Excise and Customs to correct the lacuna.

The Chamber received the following letter from Customs recently, and it is self explanatory. Thanks to the Customs as well as many members of the Chamber who put in efforts.

OFFICE OF THE COMMISSIONER OF CUSTOMS,
CENTRAL REVENUES BUILDING, QUEEN’S ROAD, BANGALORE – 560001.

TRADE FACILITY No. 47/2008
Dated: 11/09/2008

Sub: Shifting of the Operations to the Air Cargo Complex at Devenahalli. Reg

Kind attention of the Importers, Exporters, Custom House Agents and all the concerned with the trade is hereby invited to the necessity of shifting the operations (Assessment, Bonds, Audit, Service Centre, Bank, etc.) to the Air Cargo Complex at Devenahalli, which are at present carried out from the old Air Cargo Complex premises near HAL Airport.

In this Connection, the trade is hereby informed that all such operations will be transferred to the new premises in a phased manner by middle of next month. To begin with, the Service Centre operations will be gradually shifted. All the major operations from the Service Centre will be available only from the new premises from 18th of September, 2008. Only two terminals will be made available at the old premises for facilitating Query reply and amendments. Hence, all the concerned are hereby advised to gradually shift their operations including payment of duty to the new Air Cargo Complex at Devanahalli accordingly.

Assessment and all other official functions currently operated from the old premises near HAL Airport are likely to be shifted to the new Air Cargo Complex at Devanahalli by the middle of next month.

A.K. KAUSHAL
COMMISSIONER OF CUSTOMS

On Friday, 13 June 2008, I had the privilege of leading a delegation of senior supply chain managers from member companies of the Bangalore Chamber of Industry and Commerce (BCIC) on a visit of the two cargo terminals operated by Menzies Aviation Bobba (Bangalore) and Air India Singapore Airport Terminal Services (AI-SATS) at BIAL airport.

The team comprised of senior officers of a veritable "Who is who" of Bangalore industry, and was 360 degrees in sector verticals (Automotive, Biotech, Earth Moving, Electronics, Floriculture, Garments, High Tech, Logistics providers, PCB), as well as geographic locations all around Bangalore.

Hosting us were Mr. Andrew Brant, CEO, and Mr. Kamesh Peri, Director, of Menzies, Mr. Ranjiv Ramanathan of AI-SATS, and Mr. Marcel Hungelbeuhler, COO of BIAL, along with their respective operations teams. They are all competent and committed people.

Compared to my visit of 28-Apr-2008 (read article), the progress made in the last 15 days has been astounding, reflecting the hard efforts of everyone at Menzies, AI-SATS, and BIAL.

Menzies, services the European carriers, Lufthansa, British Airways, Air France, Thai, and Kingfisher, while AI-SATS services Air India, Indian Airlines, Jet, Singapore, Malaysian, Emirates, Etihad amongst others.

While the Menzies terminal is definitely way ahead in terms of preparedness, AI-SATS is making rapid strides in catching up.

After a tour of the two warehouses, the team's assessment was, that AI-SATS, which was forced to commence operations in an unprepared state, should be fully functional in about 6 - 8 weeks, while Menzies-Bobba is almost fully operational.

Compared to the poor conditions at MSIL and JWG terminals at HAL airport, the new cargo terminals are definitely superior, (read article), but they need to improve to global standards.

While new concepts in cargo handling have been brought in, the team, all expert supply chain managers, some handling over 100,00 item inventories, was disappointed by the lack of quality systems and metrics with regards to traceability and handling.

The offered many expert suggestions and critical assessment to Menzies, AI-SATS, and BIAL. The reception of suggestions was encouraging, and we look forward to constantly improving services, in-line with the global reputations of both operators, and BIAL.

BIAL indicated, that they have made facilities for low cost meals that will be helpful for the numerous employees of Customs Agents, Cargo Agents, and transporters. Traffic flow issues were being addressed.

Despite the best efforts of both the cargo terminal operators, it is still taking a minimum of 2 days to clear the cargo. The two big impediments appear to be, operations of Indian Customs authorities and some airlines.

Despite, the commitment of both the Chief Commissioner and Commissioner of Customs, to industry at a meeting in early March, there is still no assessment at BIAL, only at HAL airport. Despite the Electronic Data Interchange (EDI) system, Customs demands physical papers, which need to be collected the day following cargo landing, and physically carried across to HAL, assessment carried out, duty paid, and then the papers again carried back to BIAL for customs inspection and release. It is painful, time consuming, and only hurts Bangalore's industry by increased time and costs. The team demanded that Customs live up to their commitments and commence assessment at BIAL immediately.

Certain airlines are not further aggravating the situation by not filing their paperwork electronically. The team requested BIAL to ban these airlines from carrying cargo.

One of the cargo operators was very insistent, on not being clubbed along with the other, in assessments. Unfortunately, the one point the cargo terminal operator missed, was the fact, that the team was the customer of their customers, the airlines. The airlines decide on which terminal operator handles their cargo, not industry. Therefore, the two operators are measured in entirety.

As Theodore Levitt said, “The true business of every company is to make customers, keep customers, and maximize customer profitability”.

The team offered a constant engagement to help Menzies, AI-SATS and BIAL, reach their potential of global standards in service, and ensure industry's profitability and by extension Bangalore's growth. The encouraging response is promising.

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.

It is approaching 2 weeks since the launch of the new Bengaluru International Airport and the management of BIAL has been making steady progress in solving the multitude of problems present.

Before I offer some suggestions for BIAL management for their consideration, I make an open offer to BIAL management, on behalf of the Bangalore Chamber of Industry and Commerce. We want BIAL to succeed. We are here to understand and help. In return we ask for transparency, trust, and sincere engagement from BIAL.

Now the suggestions :

Most important : HAL is now closed. Passengers may provide a "honeymoon period", but industry cannot afford to. Services have to be delivered, and NOW!!!!!

1. Airport Flow
a.
Add your own security staff to monitor and govern flow of vehicles inside BIAL airport land.
b.
Add overhead signage indicating the correct lanes for (a) parking (b) pick-up and drop-off. The over-zealous parking attendants crowd the entrance lanes trying to divert all vehicles in to the paid parking, which only adds to the chaos.
c.
Prevent service road encroachment by parked Lorries and Vans, up to and including the fuel farm. Once the cargo village gets going it will become a mess of monster proportions.
d.
Expand the service road to 4 lanes. The current 2 lanes will not cope with the multitudes of commercial vehicles already choking the road.
e.
Consider making the service road "one-way" East to West. The main access road can be used as the West to East access for all vehicles.

2. Passenger Terminal and Services
a.
While not expecting BIAL to become a picnic spot, add seating for visitors to the airport, and add public toilets outside the terminal. Visitors may not be paying to enter the terminal, but a certain level of Corporate Social Responsibility (CSR) is good business.
b.
Add a canopy from the terminal till the bus stand. It will aid and promote the usage of the Vayu Vajra services. In these times of high inflation, helping a passenger save money is good business.
c.
Expand the terminal on a war footing. The terminal design is modular and can be rapidly expanded. 71,000 sq. mtrs., is simply unable to cope with the demand. An overflowing departure lounge only diminishes the goodwill BIAL commands, and will lessen your "honeymoon period".
d.
Do not add additional retail space in the expansion. The current over-dedication to retail can be lowered by re-distributing the shops.
e.
Increase the apron, parking stands and gates. 42 Code C stands which includes 8 contact gates for 450+ flights a day is simply not enough. At the peak of 30 flights per hour, it will get overwhelmed if there is the slightest hiccup.
f.
Increase the number of toilets inside the terminal
g.
Stick to your guns on only 2 ground handling agents only if you can ensure their performance
h.
Provide permanent, good low priced, facilities for your customers' and partners' employees. i.e. airline staff, regulatory agencies (Customs, CISF, Immigration), cargo employees, etc.
i.
Speak to CISF Commandant, make them understand the need to use all the entrances to the terminal, and all the DFMDs/X-Ray scanners.

3. Services and Cargo

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. If any of the cargo terminal operators cannot deliver results, they should be suspended from operation till they improve.

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.

a.
BIAL management needs to recognise that cargo and logistics operations are a vital part of an airport and its interaction with a much larger hinterland, when compared to the passenger catchment area.
b.
BIAL needs to 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.
c.
Need to enforce basic GMP and GS1 standards in warehousing.
d.
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

e.
Bring in the managements of both Menzies Aviation Bobba and Air India-Singapore Airport Terminal Services and get categoric commitments on SLAs 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
  

f.
Strongly consider adding a third cargo terminal, but ensure you get a very high quality vendor.
g.
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.
h.
Provide public facilities and toilets for the employees.

Long term
a.
BIAL needs to engage Bangalore; its industry, its commerce, its residents. Operate in an open and transparent manner.
b.
Show Bangalore its long term plans, especially expansion. Some specific points can include :

• Status of second phase
• Permissions for the second runway
• SLAs 1 year from airport opening date (AOD)

c.
Bring in the full expertise of Unique Zurich organisation. Marry it to local competence and understanding. Instead of looking for a Civil Engineer to head the 2nd phase expansion, try and find competencies in other fields. The top person for phase 2, has to focus on efficient process and overall customer delight, not worry about how to make a building.

I hope BIAL finds these suggestions helpful. I invite readers to please add to the list by using the comments option.

A picture is worth a thousand words. So I will let the images do the talking of my visit to BIAL on May 28, 2008.

While much is said about the passenger terminal building and the passenger experience, the support facilities are in a sorry shape, and partly explain the problems, plaguing the passenger terminal.

The cargo terminal building of Air India - Singapore Airport Terminal Services (AI-SATS) is an unmitigated disaster. How Customs authorities permitted a warehouse, that is at least 2 months away from even basic inhabitation, to function as a high security bonded warehouse, is a mystery.

What is even more sad, is that fact that SATS is renowned for it good service, and is a subsidiary of the world famous Singapore Airlines, of whom, I am still a very loyal customer. It appears they were pressed in to commencing operations before they were ready. This is an answer the BIAL management, and the Indian Customs Authorities in Bangalore should answer.

AI-SATS Cargo terminal serves the following airlines :

• Air India
• Indian Airlines
• Singapore Airlines
• Jet Airways
• Malaysian Airlines
• Emirates
• Etihad
• Dragon Air (subsidiary of Cathay Pacific)

The incomplete cargo village meant to house cargo and customs agents. Right now they are working by the roadside.

The building meant to house the airlines' staff. Right now they are having to "make do" in the BIAL administrative building (in white to the left).

Traffic congestion just to enter the passenger terminal building. Given the lack of self control of Bangalore driver, note the lack of any police or security guards to control the traffic, and signs to guide visitors to the correct lane. (The left lanes are meant for the 10 minute pick-up /drop-off).

Police, Army, and other government vehicles "hogging" the parking space in the pick-up / drop-off lanes, adding to the congestion. Of course, the 10 minute rule does not apply to them, only us poor souls who actually pay for using the airport.

A temporary shed, serving as the airport staff canteen, opposite the BIAL office, about 500 meters west of the Passenger Terminal Building. I have said before, if we do not ensure the comfort, of those who ensure our comfort and safety, we are heading for a systemic failure.

The narrow service road leading from the passenger terminal building to all the service and auxiliary buildings (BIAL administrative offices, airline offices, flight kitchens, cargo terminal buildings (CTBs), fuel farm). It was completely choked. It took me 30 minutes to travel the 2 km.

In the absence of any public toilet facilities in the auxiliary buildings, employees and workers at the airport, have to "make do", with an Indian touch to the International airport.

The narrow service road is completely jammed. It took me about 30 minutes to travel 2 km from the PTB to the CTB. There is no alternate road. I saw works of ground handling agents AI-SATS, getting off their shuttle bus, and running the 1 km to the terminal, in order to report to work on time. This narrow service road cannot handle the all vehicles. It is having unintended consequences on passenger operations since the flight kitchens, airport and airline offices are all on this service road.

Due to overloading of the cargo warehouse parking, and the lack of any policing or security control, vehicles are parked haphazardly, encroaching upon the already narrow service road.

Absolutely mayhem on the road with no policing or security to control the chaos.

Export cargo dumped outside the AI-SATS Cargo Terminal Building (CTB) in the rain.

More cargo just lying already soaked in the rain. Notice all the civil construction in progress, and the cargo and customs agents having to use boxes and cartons as tables for work.

Zinc sheets and flapping plastic making up a temporary wall, of what is supposed to be the AI-SATS Customs bonded "high security" warehouse. Customs is required to grant permission, only after a thorough inspection.

Workers on the roof of the AI-SATS warehouse. Welding was being done directly overhead the cargo. The roof is incomplete and this is the rainy season.

A temporary and naked heavy electrical outlet, with valuable cargo just dumped all around it. A major fire and safety risk.

Valuable export cargo, damaged by poor handling and storage before it is has even left our city.

Over 70% of the floor space of the AI-SATS warehouse is being used to store building construction materials. Welding is being done, right next to cargo. Due to sheer un-preparedness, over 100 tons of cargo is lying outside the warehouse on the tarmac waiting to be brought in. What cargo was brought in, is just haphazardly dumped all around, and is not traceable. Both the Menzies and AI-SATS warehouses are badly understaffed. Cargo agents, and even airlines' managers were seen trying to help AI-SATS locate cargo to pacify irate importers and agents.

An high view of the choked service road. BIAL has blocked the entrance to the service road on the fuel farm side, without notice or explanation to any of the operators, adding to everyone's misery. Over 50 tons of export cargo in still on trucks, LCVs and lorries, waiting for the last 24 hours to enter the warehouse to unload cargo.

Another view of the choked service road. Observe the incomplete civil construction of the AI-SATS terminal.

Airports in the 21st century, are like the ports and railway junctions of the 19th and 20th century -- critical drivers of economic growth. As individuals, we look to the glamour and prestige associated with passenger air travel, while tending to overlook the air cargo requirements of commerce and industry which is drives the economic engine of Bangalore.

Thanks to years of power deficiency, Bangalore's economy is technology oriented. The IT industry is an addition to the long list of "high tech" industries calling Bangalore home. Telephony, electronics, machine tools, aeronautics, precision engineering, auto parts, garments, and floriculture industries, all of which produce goods, high in value, low in weight, and in many cases, perishable. All goods which are ideally suited to transport by air.

Globally, over 40% of goods by value are sent by air instead of surface transport. At Bangalore, which lacks a sea-port, it is more than 50%. Everyday, about Rs. 150 Crore (US$ 37 million) worth of goods transit Bangalore's airport, and this is set to double as soon as additional capacity is made available.

We are entering the final countdown to the operational commencement of the much vaunted "dream airport", Bengaluru International Airport (BIA), being promoted by BIAL consortium.

However, the dream is turning sour for much of Bangalore's industry.

BIAL has appointed two companies to provide Air Cargo terminals at the new airport. One in Menzies-Bobba and the other is Air-India - Singapore Air Terminal Services (AI-SATS).

More than a month ago, representatives of BIAL, Menzies-Bobba, and AI-SATS, assured industry that air cargo operations were ready to go, and painted a rosy picture of comfort and state of the art handling.

These are pictures taken at the AI-SATS warehouse on the evening of May 22, 2008, just 2 days before the launch of the new airport. Clearly, there is a huge gap between claims and reality.

Gaps between the roof and the walls

Unfinished construction with no security visible

Inadequate infrastructure. Generator in shambles.

What is absolutely mind boggling, is that the Customs Authorities have given the "all clear" to this warehouse, and have issued the necessary permits and bonding permissions to commence operations!!!!!!

The warehouse is clearly not ready for operations, and you will observe, the complete lack of basic facilities, even safety and security, an absolute must for any bonded facility.

By all appearances, this warehouse will require about 1 month to complete. In that month, this warehouse has the potential to handle cargo of value greater than the total investment in the airport.

Losses or damages to precious cargo will result in magnified damages of over Rs. 5,000 Crore to Bangalore's industry, and by extension it is Bangalore's economy and residents who will suffer the losses, due the un-preparedness on the part of BIAL and its concessionaire(s), and the hasty, ill-advised, and wrongly motivated actions by the Customs Authorities.