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.

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.

5% rise in airfares found in quarter four last year

It was heard that Indian airlines claimed of slashing flights airfares after ATF prices came down but it has been revealed by an exclusive industry report that airfares actually risen by 5%. A report named The American Express Asia Pacific Business Travel Monitor report, revealed that due to reduction in competition and falling rupee has let airfares to increase quarter on quarter which is effective on selected categories only.

Moves have been made by domestic airlines in India to reduce fares and make it cheap flights, after ATF reduced by almost 50% last year due to fall in prices of crude. This reduction in airfares is effective only on certain categories, while in most of the segments it has been increased. Fares in India rose by 5% which is the highest quarterly rise of airfares across Asia Pacific region. Whereas full business class airfares shown 10% quarter –on-quarter increase in airfares. India published fares rose 15% on year, while they rose 26% in domestic and 13% in Intra Asia Pacific.

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.

Rupees 11 billion to be paid by Airlines to the Airport Operators

Airports Authority of India said that Airlines owe it Rupees 11 Billion, out of which Air India alone has to pay Rupees 7 Billion. Though airport has given airline operators an ample of time to clear dues but still they need money for upgrading the airports and government also approved the airports development fee for raising fund for the development of airports. Already 20 airports including Kolkata and Chennai are being upgraded by AAI by investing Rs 120 billion.

Delhi International Airport Ltd. (DIAL) has already started charging Rs 200 from domestic passengers and Rs 1300 from international passengers as development fee from March 1st onwards. The one upgrading the Chhatrapati Shivaji International Airport in Mumbai will charge Rs 100 per trip from domestic passengers and Rs 600 from international passengers April 1st onwards. Greenfield Airports at Hyderabad and Bangalore charges Rs 375 and Rs 260 from domestic passengers and Rs 1000 from international passengers on Airline Tickets.