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.

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.

UDF to be collected by Airlines at the time of selling tickets

User Development Fee (UDF) will now be collected from the passengers by the airlines, at the time of tickets selling. The charges will not be exceeding Rs 5 per passenger and will not be passed on to the passengers in any manner. Last month in February government approved charging UDF by DIAL at the rate of Rs 200 from each domestic passenger and Rs 1300 from international passenger. The UDF came into effect from March 1st for next 3 Years. This is really going to affect the prices of air tickets in India.

The following people will be exempted from paying UDF to the airlines:
- The persons travelling on infants tickets issued by the airlines.
- Diplomatic Passport Holders.
- Crew of Airlines on duty.
- Official duty persons on aircraft operated by Indian Armed forces.
- Transfer/Transit passengers (less then 6hrs stay at IGI Airport).
- The passengers departing from airport due to technical faults in plane or not suitable weather conditions for flying.

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.