Foreign Pilots to face the Effects of Recession

As a part of cost cutting several Indian airlines are on role to fire highly paid foreign pilots, which would lead them to fight the rising prices and the ongoing recession. About 950 foreign pilots, 810 commanders and approximately 140 co-pilots, working in nearly all the Indian airlines, are the first one to become the casualties of the cost cutting exercise adopted by the Indian airline industry.

Initially, airlines were allowed to hire co-pilots only until 30 May 2008 and senior pilots or commanders until July 2010. Virtually every airline - IA, Air Deccan, Kingfisher Airlines, Jet Airways and Spice Jet among others - had employed pilots from the different countries such as: US, Europe, Australia, New Zealand, Egypt, Columbia, Romania, France and Denmark.

Emergency Landing called up by Indian Airlines

Hyderabad-Tirupati flight of Indian Airlines called up for emergency landing after an hour of panic at the Shamshabad International Airport after 15 minutes of take off. The flight IC 942, took off from the airport at 1:40 pm and soon after that pilot noticed a technical fault and informed the airport authorities about the need of emergency landing.

The flight was permitted to land at 1:55 pm, all the 135 passengers on board were safe. After all this the passengers were sent to Tirupati by an alternative Indian airlines flight around 3:40 pm. The Minister for Endowments was among the passengers but was not available to comment on the situation.

Interim Chairman appointed by Air India

Air India appointed Bharat Bhushan as interim chairman and managing director to replace only a year in charge old chairman. Bharat Bhushan is the Joint Secretary and Financial Advisor at the Ministry of Civil Aviation, will take charge with immediate effect until government appoints new head at National Aviation Company Of India which is Air India’s parent company. The appointment was confirmed in a statement but a no reason was provided for the change. It has been found from sources that Menon got replaced due to differences with civil aviation minister. It has been also known through various news papers that the news centered around the slow pace of integration with Indian Airlines, the carrier that merged with Air India in 2007 to form NACIL.

The company has also been under financial crisis, with some reports depicting that they needed more money from the government to pay for its operations and new Boeing and Airbus passenger aircraft which is being ordered before the merger. An opposition by Menon to a proposed joint venture with Singapore Airport Terminal Services (SATS) for ground handling can be one of the possible reasons as well.

Two Indian Airlines and Singapore Airlines announced low fares

To attract summer holiday traffic like Air India did, two Indian airlines and Singapore Airlines announced low air fares and special schemes. A discount of up to Rs 500 per return-trip being announced by Spice Jet under a special scheme, Jetlite also did the same on Wednesday by keeping the fare as low as Rs 4170, excluding passenger service fee and the development fees charged by certain major airports.

Air India on Monday announced advance purchase fares, available on 35 domestic sectors; of Rs 2494 one way if booked 20 days in advance and Rs 2694 if bought 10 days before travel. A ‘Fabulous Singapore Stopover’ package for USD one only for the first night stay in Singapore is offered by Singapore Airlines, together with the Singapore Tourism Board and Singapore Changi Airport. Exclusive deals on hotel stay, airport transfers and entry to some Singapore’s leading tourist attractions are some of the things covered in package.

Flights Withdrawal by Foreign Airlines

Prevailing Economic downturn forces foreign airlines to pull out the flights between various Indian states. The Airlines such as Austrian Airlines, Virgin Atlantic, Sri Lankan Airlines, Syrian Airlines, Singapore Airlines, Lufthansa Airlines and many more withdrew over 100 flights in last 6 months. The rise in airport charges, the growing cost between fuel cost in India and globally, Travel agents pressurizing threatening to boycott Airline tickets sale and a 20% fall in inbound premium passenger travel forced international carriers to reduce flight services in the country.

Fruitema said airports around the world have cut airport charges, whereas Indian airports have increased theirs. Among airports that have lowered airport charges between 10 and 50 per cent are Singapore, Thailand and Korea. Our airport charges in India have gone up 9 to 10 per cent in the last few months. KLM pulled out its services from Hyderabad last October and operates only to Mumbai and Delhi. The airline has no plans to deploy additional flights to India for the time being. Its partner Air France recently pulled out of Chennai. KLM will deploy 5 per cent less capacity in India this summer against last summer. The carrier is, however, considering code-share agreements with full-service carriers Jet Airways and Kingfisher airlines to improve access to Indian destinations.

Egypt wooing private Indian airlines

The airlines like Jet Airways and Kingfisher airlines being wooed by Egypt to boost their relations with India as a Country, by providing tax concessions and also they want them to connect Cairo, Egypt’s capital. Earlier Air India was active in Egypt, it had flights flying to Cairo, but was discontinued since 1970s. The Ambassador of Egypt said that they want to attract private airlines like Jet airways and Kingfisher and use Kolkata as their hub.

There have been flights to Cairo from Mumbai, as few airlines were providing flights to Cairo from Mumbai, but now Egypt wants to cover Kolkata, Delhi and Bangalore or Chennai. Regarding Indian investments country was already in talks with Kirloskar group for irrigation and land reclamation of Toshka region in upper Egypt.

Boeing to deliver $17 billion worth planes to India

Boeing a U.S. based aircraft making company will deliver about 100 planes worth $17 billion in next 4-5 years to India. Recently Boeing launched its research and technology centre in Bangalore, during this launch President of Boeing India said that they really want to extend their footprints in India. It was projected by Boeing last year that India would need 1001 aircraft of worth $105 billion in the coming 20 years and he also added that this prediction won’t get affected despite an economic crisis.

Boeing has been on top in delivering aircrafts in India and has never faced any cancellation of its order for civilian aircrafts from Indian airlines though Jet Airways refused the order of two aircrafts last year. Boeing also competes in taking defense related projects of delivering planes in Asia with other European rival Airbus grabbing new orders for planes though there is an economic downturn.

Merger Talk denial by GoAir

GoAir denies merger talks with its largest rival in Indian aviation i.e. Spice jet. GoAir chief executive officer says that, they are not looking for any kind of merger with Spicejet. This all was told to reporters during a press conference on 25th March’09 in New Delhi. The merger has been denied by saying it as one of the rumors. The officer also said that Jet Airways and Kingfisher airlines too had a merger as a part of cost cutting by becoming code sharing partners, sharing crew and managing fuel so, there can be a consolidation with other airlines as a part of cost cutting.

The officer says that GoAir is planning to add on fleets, taking it to 20 by 2012 from current six. Though merger is good for airlines to come out of any kind of losses but still making decisions and implementing them is a task in itself. In the last the officer adds on that, an intelligent investor is always an opportunity but this all depends on conditions as well.

Pilot Drain is likely to be face by Indian carriers

West Asian Rivals are planning to hunt for pilots in India. Loss of about 100 pilots to Qatar Airways has been assumed, which is on an expansion no matter there is an economic downturn. Other West Asian carriers such as Emirates Airlines, Air Arabia and many more have been regularly hiring pilots in India, with a pay increase of about 30%. Jet Airways is likely to be affected the most, with at least 40 of its senior pilots who are going to leave, as told by two senior Jet executives.

The domestic airlines were negotiating with pilots for reducing their salaries by 25% because of economic crisis. Due to which the Indian carriers faced a loss of $2 billion last year and at this point of time a job offer is really something the pilots waiting for. A person close to the development and involved in the recruitment process said these West Asian carriers have approached pilots with state-run National Aviation Co. of India Ltd that runs Air India. “West Asian carriers are mainly eyeing Indian talent and pilots from Singapore Airlines,” he said.

Spice jet awarded for excellence in cost management

On 17th March’09 Spice jet won the ICWAI award for excellence in Cost Management. The Ministry of Corporate Affairs, presented the award. Spice jet was one out of the three companies who won the award. The people from industry, Academia and Administration were the Jury who selected Spice jet and awarded it with an excellence award. The selection was done on the basis of adapting better practices for resource management, efficient utilization of capacity, working capital and R&D efforts done by the airlines.

The Chief Executive officer of Spice jet said that he was very much delighted after winning the award. They were always concerned with the capital i.e. the investment and the gains they are getting in return, this is why Spice jet airlines is the lowest operating carriers in the airlines industry. Other airlines should work on the operating costs to get profits out of what they invest.