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.

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.

Air India to join Star Alliance by year 2010

Air India has to join Star Alliance by March’09 but now it has been delayed by a year, and it will join Star by 2010. According to an official the earlier merger of Air India and Indian Airlines has not been found useful yet, as there has been a confusion about the work duties between the two airlines. The Star and Air India has to integrate their IT platforms under one common system , but Air India still hasn’t confirmed about which platform they will be using.


A news report by a Delhi based news agency suggests that Ministry of Civil Aviation is found to be upset that talks are on with Jet Airways to join Star, as it would put Air India at a disadvantage. A Jet spokesperson said that the Jet Airways was evaluating various options, over the years Jet has decided not to align itself to a specific alliance rather go with code sharing and independent alliances. Star, at the onset, had not ruled out other Indian partners.

Air India declared as Number one carrier in October-December’08

Economic crisis had hit the tourism in India last year, whole travel industry including the airlines industry was affected by it, and still Air India emerged as number one in passenger carriage as well as aircraft movement globally. Though in overall share Gulf carriers lead the market in passenger carriage. Jet Airways has the second highest aircraft movement, is third on the passenger carriage list with a 9% market share. After starting international operations last year Kingfisher airlines is at number 46.

The figures reported by AAI this year shows Gulf airlines dominated the past giants The European carriers. The 71% market share is dominated by top 20 airlines out of which Gulf carriers control 27% with Emirates on top. The others are Air Arabia, Qatar Airways, Saudi Arabian Airlines, Oman Air, Gulf Air, Etihad and Kuwait Airways. Five South-East Asian airlines cover the 13% of market share in the top-20 list that includes Singapore Airlines, Cathay Pacific, Thai, Sri Lankan airlines and Malaysian airlines.

A new Flight launch Mumbai-Kuwait by Jet Airways

Jet Airways to launch a direct daily flight Mumbai-Kuwait from 29th March’09. Earlier it was only Kochi-Kuwait flight being operated by Jet Airways; this would be the second daily service in Kuwait from India by Jet Airways. The airline is already operating its daily flights in the Middle East countries like Abu Dhabi, Muscat, Dubai, Doha and Bahrain. The Jet Chief Executive is hoping that this flight service proves also to be popular amongst the passengers in Kuwait.

The Flight will depart Mumbai at 7:00 pm and reach Kuwait at 8:30 pm local time and on return it will depart at 9:30 pm from Kuwait and reach Mumbai at 4:00 am in the morning. About 4.82 million Indian are residing in Gulf countries out of which 550,000 are living in Kuwait so jet airways definitely going to be popular amongst the ones residing in Kuwait.

Airlines affected after Rupee hit a record low of Rs 51.92 per dollar

There has been seen a fall in Rupee, domestic airlines are likely to revise all their targets, as 30% of expenses of airlines are denominated in dollars. Airlines such as Jet Airways, Spice Jet, Air India and Kingfisher airlines usually make their payments in dollars towards the rentals of their leased aircrafts, maintenance, foreign crew and pilots. Rupee can touch 54 by the end of this month; this has been predicted by some financial firms.

Airlines pay a rental of Rs 40 Lac for the single aircraft, which has now increased to Rs 50 Lac due to the decrease in value of a rupee. This has affected many things including parking, employee costs and navigation charges. The fall in rupee is definitely going to play a major role in this year’s losses in airlines industry. The losses have been estimated for this year, it would be Rs 10,000 crores which is more than double of last year’s losses which was 4,000 crores.

India still in decision making mode to allow Overseas stake in Local carriers

Overseas airline code-sharing agreements with various Indian domestic carriers have made India to examine a plan for allowing the overseas airlines to buy a stake in local airlines. The plans will definitely going to benefit the airlines specially the airlines faced losses last year such as Jet Airways and Spice Jet. India currently will permit 49% stake in Indian carrier and no direct or indirect dealing will be allowed. The Minister stated, India will look into any attempt at cartelization. The Directorate General of Civil Aviation is inquiring into cartelization allegations after some airlines made coordinated fare increases earlier this month.


The recession has definitely affected the airlines industry for that the Civil Aviation Minister has ruled out the establishment of a stabilization fund sought by Indian carriers. A stabilization fund of $2 billion for 3- 5 years, interest free loans has been asked by the Government.

MRO joint venture between Jet Airways and Malaysia Airlines

A code-sharing agreement has been signed between Malaysia Airlines and Jet Airways. According to agreement signed in Hyderabad, India regarding Joint venture Jet Airways will take care of Malaysia Airline planes maintenance, repair and overhaul i.e. MRO in India by February end. This joint venture will be beneficial for Malaysia airlines as its planes don’t have to fly to Malaysia for MRO services, it can be done in India itself.

Malaysia’s National carrier is hopeful that Jet airways in India would become its anchor tenant after signing the code sharing agreement and they desire of having a commercially viable MRO joint venture. This code sharing agreement is definitely going to help both the airlines to build a strong bond between the two nations. This venture will attract other nations as well to participate in signing these kinds of agreement with India and will help Indian airlines to build a reputation in airlines industry world over.

Recently announced Updated report of Jan-09 Indian Domestic traffic

Indian Ministry of civil aviation recently reported the total passengers carried by domestic airlines in Jan’09. The total passengers carried were 3.3 million. Air India carried 555000 passengers, Jet airways carried 596000 passengers, 241000 passengers were carried by Jet Lite, Kingfisher carried about 919000 passengers, 393000 passengers were carried by Spice jet, Go air carried about 81000 passengers and Indigo airlines carried about 457000 passengers in Jan’09.

The seat factors of domestic airlines in Jan’09 is nearly varied with each other: Indigo has 72.2% of seat factor, Spice jet about 68.3%, Jetlite 67.5%, Jet airways 64.8%, Kingfisher 64.0%, Go air 64.0% and Air India 60.2%. The report generated shows that Kingfisher airlines are ahead of others in carrying passengers and Indigo in seat factors in the month of Jan’09. The Jan’09 domestic traffic data is the result of introducing promotional flights airfares by almost all domestic airlines, report may vary a bit this month as there has been a rise in fares in Feb’09.

A new base fare of Re.1 introduced by Jetlite

As all Indian Airlines are hiking the base fares Jetlite introduced a base fare of Re.1 as a promotional fare. The fare is applied on some of Metro cities flights as well. Meanwhile Jet Airways also announced Rs.300 base fare on the flight routes to major cities. The fares will be effective from 30th April’09. Jet Lite introduced its promotional base fare as it heard about other airlines withdrawing the promotional base fares.

All airlines including Spice Jet, Indigo, Kingfisher and GoAir had a hike in their base fares; they all are now concentrating on earning revenues rather than seat factors. It was assumed that there will be a hike of Rs.1800 to Rs.2000 on the flights from Mumbai to Delhi. Air India in response to withdrawal of promotional fares said that the response was not upto the expectations, so they decided to discontinue with the promotional fares.

Economy class ticket in Just Rs 99 – Air India

Air India recently declared its economy class fare price which is Rs 99 and is valid for the month of February only. This offer will also continue after February for the one who books a ticket 21 days in advance. The Business class travelers can enjoy the scheme till February end under which the passenger’s spouse is allowed to travel by paying only the fuel surcharge and the airport user development charge. Air India was lead by Jet Airways and Kingfisher Airlines last year in flight bookings.

The civil aviation Ministry released its data depicting Jet Airways as India’s largest domestic air services handling a market share of 29.5 percent followed by Kingfisher Airlines handling a market share of 27.6 percent market share. Air India is only handling a market share of 16.3 percent after Jet and Kingfisher airlines which has immensely effected the business of Air India this is the reason why the airlines is introducing new schemes this month.

Kingfisher Airlines Deprived from aviation fuel supply

The Oil marketing companies which are being run by State has threatened Kingfisher airlines that if they will not clear their outstanding of Rs 158 crores the oil marketing companies will stop supplying aviation fuel to the airlines from next Wednesday. The oil companies has started supplying the fuel to Kingfisher and Jet Airways on cash and carry basis from last few days due to the nonpayment of their previous dues for the Last week of October. Jet immediately responded to the situation and paid its dues but Kingfisher still hasn’t cleared its dues with Hindustan Petroleum and Bharat Petroleum.

Kingfisher Airlines has been affected the most by hike in ATF prices and this can be seen by the loss of Rs 2500 crores faced by the airlines this year. It was decided on 22nd October’08 that the airlines can pay its dues in six easy installments by end of March this year and also asked Oil marketing companies to revise ATF prices every fortnight instead of every month so that international market also gets benefited from the falling ATF prices.

Fare Cuts by Jet Airways and Air India

Jet Airways and Air India has announced to cut their air fares and revised rates will be in effect from 1st January’09 in which Jet airways will cut the fare up to 40% on domestic routes. The air fares will go on like this Rs 2000 for Mumbai-Delhi flight, Rs 4065 for Mumbai-Kolkata route, Rs 1220 for Bangalore-Mumbai and as low as Rs 500 for Mumbai-Ahmadabad flight. Taxes of Rs 3,500 are also to be included on each ticket. This means that the total cost of an air ticket will be with taxes.

Another airline Kingfisher airline has also stated that fare cut will be implemented by New Year. The Indian air operators are reluctant to revise air fares despite the fall in fuel prices. The demand of aviation turbine fuel under the declared goods category by Indian air operators will bring down the sales tax from an average of 32% at other airports to a uniform 4% and due to this Indian aviation ministry has forced the major airline companies to go for fare cuts.