The Alliance Conundrum & Air India

Chocks-on..The Weeekend Platter  ( 14 SEPT.,2013 )  ISSUE – XIII 

Oops !! The Alliance Conundrum  &  Air India……

Will it be…’ Star Alliance ‘ or ‘ One World ‘ or ‘ Sky Team ‘……

Air India Spokes person… “We cannot wait endlessly for induction into Star Alliance. The members are scheduled to meet and vote at the end of this month. If we do not receive a positive response, we will proceed with our talks with Qatar Airways for membership in OneWorld,”

The ‘ Star Alliance’ Dilemma…..

…’ “Star Alliance’s market share(in India) is declining.”…. “The feeling was that Star is no more a natural choice for passengers from India. Most of the traffic is flying Indian carriers or being taken away by Gulf airlines,” 

Qatar Airways has approached Air India to join Oneworld alliance….

…Qatar Airways, the first Gulf carrier to join an International Alliance, has offered full support to Air India,to join One World Alliance. Star Alliance, with 28 airlines members is significantly larger than One World,with 12 member airlines…

Are Air India’s talks with Adria Airways directed at support for Star  Alliance…..

“.... Air India continues to engage with major airlines for enhancing bilateral cooperation, and also continues to maintain dialogue with Star Alliance in an effort to expand its global reach and connectivity," said an Air India spokesman.

Some Media Comments on Air India’s quest for an Alliance…

…..Star's 27 members voted unanimously to place Air India's membership "on-hold" after the carrier failed to meet a July 31 deadline to fulfill all joining requirements, despite granting AI ample timeline extensions over the course of nearly 4 years to get its act together…..

…..Air India's boot from Star was single-handedly one of the most embarassing high-profile blunders in the carriers' history, as no surviving airline has ever been denied membership from Star Alliance…..

…..As the Persian Gulf Carriers expanded into the Americas, as well as secondary and tertiary cities in India, Star Alliance network carriers from Europe and North America felt the pressure in their Indian markets. So, it was necessary to develop local ties with an Indian partner…..

…..In spite of its re-branding initiative, which went live in 2007, Air India's alliance integration process encountered massive delays and hold-ups. The largest pain point was Air India's ongoing merger with Indian Airlines, which was poorly executed on all fronts…..

……In May 2011, Star Alliance CEO Jaan Albrecht issued a warning to Air India that its invitation to join the alliance would be withdrawn if the integration process was not completed by July 31 of that year……

…..it appeared that what sealed AI's fate was an official voting process that had taken place among Stars 27 members… it became apparent that a large contingency of existing Star members simply did not want to include Air India included in the alliance…..

…..Air India has to join an Alliance.  Air India cannot compete as an unaligned network carrier in the interim without sustaining heavy losses….

( Culled from an article by Rohan Anand in UPgRD network )

Codeshare with Latin American carriers…..

…..Air India, is exploring options for a codeshare with LATAM airlines group, South America’s largest airline group, for access into the huge South American market….

Happenings in the Indian Market……

Shri Ajit Singh, Minister of Civil Aviation……on reducing VAT on ATF…..

….At a Conference of Civil Aviation Ministers, the MoCA said……’ Lowering of VAT on ATF by Chhattisgarh has led to “a six -fold increase in ATF uplift”….. “So my request to you all will be that you should take up with your government to reduce VAT on ATF to four per cent”…..

Shri D Sudhakara Reddy, President, Air Passengers Association of India- on fare hike….

…. There has been a hike in the aviation turbine fuel a few days ago and all the airlines have increased the fares by 25 per cent one after the other, though fuel price had increased by only 6.9%….. “This is not the first time they have increased the fares in tandem and it has become a practice with all these airlines……

Senior Air India Official- on a Sovereign Guarantee for a bank loan……

“…. The current account deficit is at an all-time high. There is a resource crunch in the finance ministry, due to which it has become difficult for the government to infuse funds. There is a shortfall of around Rs 2500 crore in the total sum of Rs 15,600 crore targeted for infusion in the airline in FY13 and FY14,”……

Shri K.N. Shrivastava, Aviation Secretary – on cancellation charges levied by airlines….

..... We have asked airlines to have a graded system for cancellation and rescheduling charges. Airlines have agreed to consider it and said they will come up with a formula soon,"

Passenger friendly initiative by the Ministry….setting up an OMBUDSMAN…

…Shri KN Shrivastava, in a major decision that will empower the customers announced…” Time has come to implement the ombudsman system. We will have ombudsman set up in Delhi and Mumbai to begin with. Then, depending on experience, we will have them in major centres,"…..

Air India helps Delhi Airport witness a surge in transit passengers  ( Economic Times )

Spokesperson of GMR airport, … "While Air India is the biggest contributor to our growth as a hub, we can't discount others such as Jet Airways,"…..

( A very retrograde development, by the fledgling and loss making Air India.  Air India, instead of helping its position, and strengthening its footprint in Mumbai, preferred to work for the economic resurrection of Delhi, at the cost of uprooting and diluting its presence in Mumbai. In a country like India, where foreign carriers are trying to establish their positions in major Indian gateways, Air India on the contrary - Uprooted itself from a long established base of Mumbai. Who did this benefit ? Not Air India, for sure ! WHAT AN IRONY ?? Air India has become a saviour for all & sundry….except for its self…)

Vow !! Great News….King Fisher may revive……

… the company on Friday informed the Karnataka High Court that a scheme is being worked out to revive the airline by finding investors…. “You may get good news. You have waited so long, wait for some more time…”, remarked Justice S. Abdul Nazeer,

Happenings Around the World…..

S.E. Asia Region becomes the capital of Low Cost Airlines….
The region’s LCC fleet is poised to grow by about 20% in 2013, surpassing over 500 aircraft at year-end.

Now Aeroflot to Launch a Low Cost Airline….

Aeroflot's goal is to get a new carrier in the skies by 2014 to have a chance at competing with European low-cost carriers that are now launching routes to Russia. It will need to first convince Russian government to change current aviation regulations- Samantha Shakman

Emirates to Launch Worlds Longest Flight……

Emirates in partnership with Boeing is planning to launch Ultra Long Haul flight of 20 hours duration. The flight is dependent on Boeing’s promises to deliver the so-called 777X, an improved version of its biggest twin-engine jet with new wings and larger window….

Qatar Airways wanted to Join Star Alliance, but Lufthansa was ‘ Hostile ‘…

Qatar Airways CEO,Akbar Al Baker, said….”  My first code-share with a European carrier was with Lufthansa, but unfortunately their strategy is to kill competition,” …. “It is to shun Gulf carriers, and I think they have lost in this very lucrative alliance chess game.”

Vow ! Did you Know this ?....Longest Flights in the World..

SINGAPORE  AIRLINES – Newark to Singapore – 18 Hours , 50 Minutes ;
TURKISH AIRLINES –  Istanbul  to Sydney  -  18 hours , 20 Minutes ;
SINGAPORE  AIRLINES – Los Angeles  to Singapore  -  18 Hours , 05 Minutes ;
DELTA AIRLINES -  Johannesburg  to  Atlanta – 16 Hours , 55 Minutes ;
AIR CANADA – Vancouver  to Sydney  - 16 Hours , 35 Minutes  ;
QANTAS -  Sydney  to Dallas – 15 Hours , 20 Minutes

 

With this, we sign off for the week !!

Wishing You and Your families, Happy Ganpati & A Swell Weekend  !!!!

Our Credo….”Network & Be Informed “

( PLEASE VISIT OUR WEBSITE : http://chocks-on.blogspot.in/ )

The Dollar....Holler...!!

Chocks-on….The Dollar…HOLLER !! ( 07 SEPT.,2013 )  ISSUE – XII

The Dollar yo-yo’s…Increases Airlines woes…

Mounting operating costs push up air fares  ( Business Standard )……

… With the rupee falling 20 per cent against the dollar  and fuel prices touching a record high of Rs 75,000 a kilolitre in Delhi, airlines had little room to manage costs….Domestic airlines raised fares… by an average 20-30 per cent for the economy class ….

New headwinds for aviation. ( Live Mint )…….

….Executives of Jet Airways have forecast a $60 million hit on earnings because of the rupee’s fall in the September quarter…..

Spice Jet – Spokesmen…….

…. The rise in our operating costs has been abrupt, serious and largely driven by the rapidly weakening rupee. About 75 % of the total spending is either directly or indirectly influenced by the dollar, which has appreciated 25% this year alone…. we are compelled to put through the fare hikes…..”

Jet Airways…..Spokesmen….

…. "The airline has hiked its fares by 25 per cent with immediate effect,… the hike is in total fares.". has started raising airfares from Tuesday. According to PTI, the airline has effected a steep 25% fare hike….

Air India official…….on fare hike…..

….. “"We have hiked fares by 23-25 percent on all domestic routes. This has been done to off-set the recent increase in ATF price," an Air India official said on Thursday 06 Sep, 2013. "Going forward, there might be an upward revision in fares for international routes…..”,

Air Asia’s Shri Mittu Chandilya……

…… “I have seen the fares jump. Eager for us to get started as I believe we would shake up the fares. It is more of a pressure to get your cost structures right,”…..

Indigo….Spokesperson…

"IndiGo has revised upwards its fares, which are now 25 per cent higher than earlier," a source in the budget carrier said here on 6 Sep. 2013…

Indigo…..CAPA’s comment….

…. all airlines, including the profitable low-cost carrier IndiGo, may post a loss this quarter…

Fares may go up further by 25 %......

Sabina Chopra, Co-Founder and EVP of travel portal yatra.com said… “We expect another increase, up to 25% in October, as airlines look to cash in on festival demand.”

Industry News…..India  !!!

At Last…..Boeing's Nagpur MRO to open by December 2013…..(Indian Express )

….: The much-delayed $100 million MRO (maintenance, overhaul and repair) facility, which is being jointly set up by Air India and US aircraft major Boeing at the Mihan SEZ in Nagpur is likely to be functional by the year end, a source at Maharashtra Airport Development Company said.

( With this an important component, of the Boeing aircraft purchase deal by Air India is accomplished. This will be a REAL boost to AI’s newly set up Engineering subsidiary )

A Global Jet Card….for the High Networth IndividuaL ( HNI’s )

…"By launching India's first global jet card, we aim to redefine ownership of a private aircraft. With the dollar value touching all-time high, the card provides an ideal choice for customers to avail all the benefits of owning an aircraft at a fraction of ownership cost," Baron Luxury and Lifestyles chairman and chief executive Rajeev Wadhwa said after the launch.

Air Asia India’s - Slow….Steady…and Sure…..PROWL !!  Watch Out…

…..Air Asia scouts around for a foot print in Central India, to provide air connectivity to major cities across the country. Shri  Mittu Chandilya, CEO, Air Asia India met the Chief Minister of Madhya Pradesh, for setting up a hub in Indore or Bhopal….

( An extremely smart move and strategy. MP is one of the 3 states in India, that have lowered the sales tax on ATF to 4%, compared to some states that levy a sales tax of 30% on ATF. Good Luck- Air Asia…..we are waiting for the experience called…’ AIR ASIA’ !! )

Air India to acquire a dozen 70 to 90 seater planes for Alliance air….

....Air India’s soaring Regional aspirations under the Alliance Air Brand, to link Tier II and Tier III cities. The airline proposes to shortly float a global tender for the same…

( Why this sudden urgency to revive / resurrect Alliance Air NOW ?.....For a loss making airline Alliance Air plans could have been deferred to a later date….)

Vow !! Etihad offers flying Nanny Service on Long Haul Flights…..

Etihad Airways has introduced 'Flying Nanny' service on its long-haul flights. It is an in-flight childcare assistance programme for families. providing a 'helping hand' to families and unaccompanied minors. 300 cabin crew members of Etihad Airways have completed enhanced training for the role.

..The Chatterrati….

QANTAS – All set to upgrade its 30 Airbus330 Executive Class Cabins, where seats can be left in recline position during Landing and Take-offs….

AIR ASIA INDIA- May miss its deadline of a December 2013 launch….

WARREN BUFFET – about airline industry…..’ “a death trap for investors.”

LUFTHANSA – CEO- Carston Spohr… “Five per cent of the global caviar production goes to Lufthansa first class.  We are the biggest caviar customers in the world.”

EMIRATES- launches daily non stop service to Sweden- making it the 135^th destination in its 77 countries network….

Wrap – Up…!!!  Is it Good or Bad ???

All  is not well with the Indian Airline industry. Hard times, it  seems , are hitting Airlines in India. Fuel Prices have escalated. US Dollar continues to play spoil sport. It’s the lean season for travel. Fares have already ( domestic) seen an increase of 20-25%- while the peak season is still to set in. The Government of India and the regulatory authorities are concerned at  the negative indicators all around. The Government has called for a meeting on 10 Sep., to request states to review taxes on ATF. Understandably, the government  is concerned at the recent spike in fares, to tame them, before they hit the ceiling.

Callibrated, measures are the need of the hour. Though, government should not meddle with market forces and allow the market to find its levels, nonetheless, the government cannot allow a free-for-all scenario to take hold. We wish, the Syria crisis gets resolved and Fuel Prices stabilize at the sub $100 per barrel. The dollar havoc can be mitigated to an extent through reduction in taxes on ATF.

Flying has to be AFFORDABLE and SUSTAINABLE.

With this we sign off for the Week.

Wishing You and your families a Wonderful weekend.

 

Our Credo….”Network & Be Informed “

( PLEASE VISIT OUR WEBSITE : http://chocks-on.blogspot.in/ )

 

 

Chocks-on….The Week That Was ( 31 AUGUST 2013 )   ISSUE – XI

VOILA !! India – The Hen That Lays the Golden Egg…!!

Yes !! The craze for India & Indians continues…..

Airlines of all types, LCC, Hybrid, and FSC are scrambling to operate into India..

SQ, LH,QR,CX, BA, Turkish are all demanding increase in number of flights….

Now Sri Lanka Airlines plans to increase flights from the current 48 to 60 by 2014 to 70 by 2015….;

Malindo Air- The first International Hybrid airline from Malaysia, all set to call India..

Chinese carriers are increasing operations/ frequencies to  India to a daily operation

Cebu Air, the LCC of Philippines, has obtained permission for operations into Delhi…

…& also the Indians are the most sought after tourists in various countries….

…refer headlines of Chocks-on, issue of 24 August, Issue- X, last week…..

….What they said about Air India…..

Shri Ajit Singh, Minister of Civil Aviation……on B-787…..

.... The Boeing-787 Dreamliner aircraft have proved to be commercially viable as Air India Ltd has earned a surplus of over Rs 18 crore in 52 days of its operation,…..

Shri Rohit Nandan, CMD, Air India……on the escalation of the US Dollar….

…“As far as the escalation of the dollar is concerned, it’s going to impact all of us, but since some parts of our own business is in dollars, therefore we are very well hedged,…Increase in the value of the dollar doesn’t affect Air India as much as it might affect other airlines.”….

Shri Syed Nasir Ali, Dy MD, Air India…..on operations to Australia……

..As traffic grows, I hope that there will be a dedicated plane between Melbourne and Delhi. I am sure it will come,……the response from the travelling public has been overwhelming.. “I am taking that back home – perhaps we need to look at a direct flight. If the demand continues, I am hopeful,……

Shri Chris Woodruff, CEO, Melbourne Airport……

… I think what will happen very soon though is that the demand from Melbourne will very quickly outstrip the demand from Sydney that they are going to have to delink them. I think they are committed to doing that. You’ve got to give it a good few months…..

Shri Nishantha Wickremasinghe, Chairman, Sri Lankan Airlines……

.... "We cover most of the cities in India…."We have not exhausted all the routes given to us under the bilateral agreement and have room to include more destinations,…. "We promote travel within the island-nation as it is cheaper for Indians to go to Sri Lanka compared to other Indian cities for a holiday…..

Shri Arun Mishra, Director General Civil Aviation- on Aviation Blacklist….

…."They have issued an order which we have just received that they have found India compliant and will remove us from significant safety concerns list,"…..

( A very positive development, as it may permit B787 operations into Japan by AI )

Latest B-787 of AI Arrives in New Delhi, on 28 Aug, 2013…..

.... The aircraft after flying non stop for 14 hours 12 minutes, from Paine Field in Washington state, USA, to Delhi, a distance of over 7,200 nautical miles (about 13,350 km) as Air India flight 164 touched down in Delhi on 28 Aug, 2013….

AI spokes person on Air India Regional ( Alliance Air) commencing ops from Mumbai….

..... Alliance Air will be introducing new flights and routes on its network from September 9 from Mumbai…..”, under the banner of AI Regional…

Air India calls for creative pitch…..

Great and good thinking by Air India. Its high time, a professional agency was deployed for Brand Building & Product positioning, in a focussed and a planned manner.

….Our Country cousins & what they did….

Shri Sudhir Raghavan, CCO, Jet Airways- on Jets new flight to Singapore from BOM……

….“With the introduction of this additional flight, we aim to provide our guests seamless connectivity to points across Asia, Australia and New Zealand from Singapore. The new flight would also help in connecting our guests flying into Mumbai from Jet Airways’ extended network to Singapore and beyond……

Shri Mittu Chandilya, CEO, Air Asia India…..

..... "Tony is the driving force behind the operations, but having someone like Ratan Tata on the board is amazing."….. "When people say I was a model (in college, to pay for education) and a consultant, they get it right….

Jet Airways may do away with the low cost model…..

…“The plan is to start giving free meals to passengers like it was earlier on JetKonnect and bring the airline at par with Jet Airways in all respects,” …..“This will be one of the many steps towards aligning with Etihad.”…..

( Good idea !! Its better to sail on one boat, and consolidate brand strength, rather than dispersing the resources, and yet not getting optimised in any one…..)

….Quicklets ….in a jiffy…..

Ancilliary  Revenues in the LCC : Hawaiin Airlines, for inflight entertainment offer iPads to passengers at US$ 15/-…

Ethiopian orders a further  8 Boeing 787’s for its fleet…..

Spice Jet to start Pune- Sharjah service from late Sep 2013…

Norwegians Long Haul LCC, B-787, sets new benchmarks in LCC, IFE space….

Emirates airline plans to more than double its network of US destinations in the next three to five years to a total of 15 US cities, up from seven currently, a company official said….

A CNN Anchor Is On A Mission To Ban Babies From Business Class 

Air India to sell off its prestigious residential properties in Mumbai to raise funds…

Finally, Air India Touched down in Sydney & Melbourne, amidst a rousing welcome of water jets and traditional Indian folk dances, with the virtual ‘ who-is-who’  of the Aviation industry present to welcome the flight.

Another first for Air India was, its B-787, which was the first ever to land in Australia, giving AI the distinction of being the first operator of this aircraft into Australia.

Another first for Air India’s B-787 operation into Australia was, that it was the longest commercial flight operated with a B-787 by Air India, on its B-787 network.

WELL DONE – AIR INDIA !!!

With this, we sign off for the week !

Wishing You and Your families, a Wonderful Weekend  !!!!

Our Credo….”Network & Be Informed “

( PLEASE VISIT OUR WEBSITE : http://chocks-on.blogspot.in/ )

Addendum to our Issue XI of 31 AUGUST, 2013

Addendum to Chocks-on  ( 31 AUGUST, 2013 )  ISSUE - XI

Chocks-on….The Week That Was ( 31 AUGUST 2013 )   ISSUE – XI

( We regret, that due to oversight, we missed out inclusion of this important, point in your favourite week-ender ‘ Chocks-on’ ! Inconvenience is sincerely regretted )

Re-Commencement of Operations to Tel Aviv- a lucrative market for India and Air India…..

With the arrival of another B-787 on 28 August 2013, the available B-787 capacity must be deployed on routes and markets, that offer a commercially viable potential  for a profitable operation. Tel Aviv, because of the large Jewish community in India, as well as the growing political and economic relations between the Government of India and Israel offers an immense opportunity to Air India, to derive the first mover advantage.

Reference the last issue of ‘ Chocks-on ‘, we had suggested, that AI needs to expand the network, by operating in to new markets, rather than enhancing capacity in the existing market. After successfully accomplishing the Australia operations, it is our considered opinion, that Air India should on a priority re-evaluate and re-commence operations into a market, that has all promise of a profitable operation.

Wishing You and Your families, a Wonderful Weekend  !!!!

Our Credo….”Network & Be Informed “

( PLEASE VISIT OUR WEBSITE : http://chocks-on.blogspot.in/ )