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.

A review of creative duties by Air India

Air India has decided to review its creative duties and will have a separate media agency to handle all its Media duties. Earlier they use to give media work to existing media agencies. This all has been done to reduce the cost they have been spending in media related issues. A total of 25 crores have been spent on advertising last year. The development has been confirmed by an Air India official spokesperson he said “at the time of merger between Indian Airlines and Air India the two airlines creative agencies started working for Air India.

Air India Cargo and Air India Express are Air India’s current subsidiaries. Air India Cargo provides air cargo services and a dedicated fleet, Air India Express which is a budget airline operates flights in the countries of Middle East. The merger of Indian Airlines and its subsidiary, Air India regional into Air India, these two became subsidiaries of Air India. The new logo of Air India is a red colored flying swan with the ‘Konark Chakra’ in orange inside it, in which the chakra has been taken from the Indian National Flag and the swan from the Air India’s previous logo.

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.

British Airways to strike a code-sharing agreement with Go Air

British Airways will soon strike a code sharing, co-branding and marketing agreement with GoAir. This would lead to an equity stake in Go Air by British Airways. By this code-sharing agreement both the airlines will get equally benefited, BA can mark its reputation in Indian market and Go Air can do the same in international market. BA is the largest passenger’s contributor after US so; this is definitely going to help Airlines industry in India. The deal would benefit Go Air by $350 million which is definitely a huge profit to the airlines. For this deal Go Air has appointed a London based Bank Euromax Capital for the transaction.

Indian Government is also looking forward to this agreement between the foreign airlines with domestic flights India. Earlier Royal Bank Scotland and Standard chartered were the two banks which were supposed to make an equity investment into GoAir. The IATA in response has said that 2009 will be the worse year than 2008 in terms of number of passengers and yield, so in these conditions a foreign airline having an equity share in Indian airline is definitely going to lessen the effect of recession in the market of airlines industry.

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.

Business Travellers never demands for a luxury travel

A survey has been done regarding what a business executive demands while travelling, and was found that it wasn’t the luxury extras but the good service and basic efficiency. They want the things that can help in their official work; proper internet connection is their main priority. Now a day’s business professionals want a proper Wi-Fi connectivity so that they can complete their pending tasks before they reach somewhere for their meeting.

According to the survey the business travelers will go for the basic facilities no matter what is the price of Airline Tickets. Proper internet connectivity is the main priority for worldwide business travellers rather than a peaceful room, good transport and central location. Economic pressure has let the business professionals to think more about the basic facilities rather than the luxury requirements. The same is for the hotels they stay in, hotels must have proper internet connectivity rather than the luxury. Corporate companies have started looking more closely into the travelling expenses which has made the business travellers specially in Asia-Pacific to look for Cheap Air Tickets with basic faculties rather than having luxury flight experience and spending too much on the tickets.

Indian Airlines Plane narrowly escaped a collision

It was a narrow escape for the passengers in Indian Airlines IC 866 was about to collide with a chopper at Mumbai airport. The pilot was quick to spot the army choppers landing on the same runway. It was truly the mistake of Air Traffic Control Mumbai that allowed The President’s plane to land on the same runway when an Indian Airlines flight was about to take for Delhi from there.

The Indianairlines plane has already run about 1-1.5 kms on the runway when an Army helicopter landed. The pilot saw the helicopters when they were just 50 meters away and applied emergency brakes. The plane wheels got damaged as well while the emergency brakes were applied. All the passengers were reported to be safe at the end. The operation of Air Traffic Control comes under scanner and after this incident Airport Authority has launched investigations into the matter.

Hijack scare troubled Security at Delhi Airport

A mid air hijack scare created panic for the on board passengers and the airport security, when an Indigo flight was going from Goa to Delhi. The accuse was arrested and interrogated by Delhi Police on Monday after which the court has sent him to jail for 14 days. The accuse was not happy with the seat allotment and was behaving awkwardly. His behavior forced the pilot to send a hijack alert which caused the emergency landing and the plane was kept in isolation for at least two and a half hours after that.

The accuse threatened the air hostess by saying that he was armed which was the main cause of calling a hijack alert. The CISF took position outside the plane while NSG was inside, taking charge of the situation. Once the situation was under control and was confirmed that there was no hostage situation the NSG was allowed to go ahead and ask the passengers to deboard the Indigo airlines 6E44. Finally, all the passengers and airline crew were safe and the hijack was declared as fake by the NSG.