1. Indian expats celebrate 62nd Republic Day in UAE
Dubai: Indian expatriates in Dubai celebrated their nation's 62nd Republic Day on Wednesday.
This year, the celebrations were held at the Indian High School.
The event began with hoisting of the tricolour flag by Vayalar Ravi, Minister of Overseas Indian affairs and Civil Aviation, in the presence of Sanjay Verma, the Consul General of India to UAE. As the Indian flag unfurled to the tune of the national anthem, patriotic fervour filled the air.
The consul general then read out extracts from the Indian President Pratibha Patil's address to the nation on the eve of the republic day, to community members of all ages and sections of the society gathered at the school. It was followed by a march past and performance by the Indian High School children.
The event was themed as ‘The celebration of India… of Indian High School… Jai Ho!'
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2. GVK Power to build airports in Bali, Java
MUMBAI | BANGALORE: Hyderabad-based infrastructure development company GVK Power and Infrastructure (GVKPIL), which also runs the airports at Mumbai and Bangalore, will develop international airports at Bali and Java in Indonesia.
This will be the company's first successful agreement with a foreign government for an international project after its failed attempt for modernisation and upgradation of the Male airport in Maldives last year. The company signed a memorandum of understanding (MoU) with the Indonesian government on Tuesday for execution of these projects right from conception to design to operating and managing these airports with an exclusivity clause.
"The Indonesian airport projects are strategically the next move for GVK. Java and Bali are growing very fast. We have to get a feasibility study done for traffic, investment and terms to be submitted to the Indonesian government," GV Krishna Reddy, chairman, GVKPIL, told ET.
He, however, did not gives any specific details outlining the project but it is estimated that the group will pump in close to $3billion to $4 billion in the development of these greenfield projects. GVKPIL will be partnering for these projects with Indonesian government's special purpose vehicle for airport development and a board for foreign investments.
Aviation experts feel because nothing much is happening in India in terms of projects to be bid under public private partnership, Indian companies which have obtained expertise in airport operations are now flexing muscles in the international arena.
"GVK has ambitions to build international airports and for this it needs to have airports abroad under its portfolio. The development of airports closer home like the one in Indonesia will help it create that critical mass which will help it bid for airports internationally," said Amber Dubey, director, (Aerospace and Defense) at consultancy firm KPMG.
Bali's current international airport is in its capital Denpasar, and is the third largest airport in Bali, GVK has proposed to develop an airport in the northern part of Bali.
3. Foreign airlines clamour for more India seats
It looks like a battle of wits. Foreign airlines are clamouring for more seat entitlements from and to India, even as domestic carriers have finally got permission to raise capacities in select international sectors. With international traffic from India growing, the two sets of airlines are clamouring for more seats, but the government, it appears, is not obliging everyone.
Officials in the ministry of civil aviation acknowledged that requests are pending from countries such as Qatar, UAE, Singapore and Germany for increased seats and new destinations within India. Emirates, Qatar Airways, Singapore Airlines and Lufthansa are seeking increased business from India.
“The UAE wants a fresh bilateral with more seats and destinations from India. Currently, Emirates is allowed 54,000 seats a week. Qatar’s current entitlement is 23,000 a week. Singapore Airlines, Qatar and Emirates - all want more seats from and to India. Lufthansa wants to bring in the A380 and this obviously means more seat entitlements. But we are studying each request carefully. Since 2009, only about 7000-8000 new seats have been allowed and these were offered to Qatar Airways - they have failed to use even these. Instead of concentrating on allowing more seats to foreign airlines, we want Indian carriers to also increase their share in the international air traffic pie,” the officials said.
They pointed out that among domestic airlines, permission has been granted to Kingfisher and IndiGO to operate flights to Colombo from destinations other than Chennai - the Chennai-Colombo route is already being serviced by Air India and SpiceJet. In addition, Jet Airways has been allowed the Bombay-Rome route (apart from its daily service to Milan) and another service between Bombay and Amsterdam - this route has no flights by any Indian airline as of now.
Also, IndiGo has been awarded permission to go to Singapore - a route where full-service carriers Air India, Jet Airways and Kingfisher are already operational.
So how will this help Indian carriers with overseas ambitions? The officials said that there should be a 10% increase in international flights by Indian carriers in the coming months. Indian airlines presently account for four of every ten international flights to and from India.
4. Aviation industry adjusts course amid changing market
Airports, airlines and aircraft manufacturers are navigating through a lingering economic storm and structural changes in the industry toward new destinations, industry executives say.
For an industry that has lost $60 billion over the last 10 years, new directions are needed.
On one hand, airlines increased profitability while holding the line on seating capacity in 2010. But fewer seats meant reduced passenger traffic at U.S. airports, which reduced airline revenue and increased costs per enplaned passenger.
"Our fares have gone up and the number of seats haven't gone up, which is keeping our passenger traffic down," said Jeff Mulder, Tulsa airports director.
At Tulsa International Airport, daily airline seating capacity is 5,500 seats, down 13 percent from 2007. Airline passenger traffic last year was 2.84 million, down 1.46 percent from 2009.
Mulder said the airport's revenue comes primarily from airline landing fees and terminal space rentals. In addition, non-airline revenue include parking, rental cars, fuel flow fees and retail and food concessions.
Predicted revenue in the $52.26 million 2011 Tulsa Airports Improvement Trust budget is down 2.5 percent for the year to date. The fiscal year began July 1.
"During fiscal year 2010 our airline costs per enplaned passenger increased to $7.62 from $6.95 due to the loss of passengers and an increase in airline rates," the airport staff said in its "Assessment & Action Plan for 2011."
"The forecast cost per enplaned passenger for the FY-2011 budget is $7.64."
During 2010, the airport lost Frontier Airlines' service to Denver but added larger aircraft service to Atlanta on Delta Air Lines. In February, American Airlines is eliminating its weekend nonstop service to Miami, but United Airlines is beginning new nonstop service to Washington Dulles International Airport in April.
With domestic growth relatively stagnant, airports, airlines and aircraft manufacturers are looking for new airline entrants, international traffic, global airline alliances and foreign carriers to improve their outlooks.
TAIT board members last week approved $75,000 in incentives to the first airline that begins a nonstop route to an international gateway airport on either the East or West coast.
TAIT also proposes to increase revenue by instituting a customer loyalty program. It also wants to construct a 2.5-acre car travel plaza just east of the Hilton Gardens Inn that would generate lease, concession and fuel revenue.
But real growth in the industry may have to come from outside the United States, industry analysts say.
"The real story is that the airline industry has achieved something not present in the 32 years since deregulation: stability and overall solid management," said Boyd Group International in its "Dealing with Hard Realities: Aviation Predictions Year 2011."
"There are no loon-airlines starting up trying to make up losing fares by capturing passenger volume. There are no indications of significant additional capacity coming on line. And, as the fare increases announced in the last week of December 2010 clearly indicate, carriers are looking over the horizon and pro-actively planning for future shocks to the system - in this case the near-certainty of spikes in fuel prices."
Robert Herbt, founder of AirlineFinancials.com, agreed that the airlines' capacity restraint enabled them to raise fares, which are up 14 percent in the last year.
"There is enough passenger demand in the next year to work through another 15 to 20 percent fare increase," Herbst said. "If fuel prices stay $100 (per barrel crude oil) or less, airlines will do well this year. If fuel gets up too high, it's going to be hard for airlines to raise fares enough to cover their costs."
U.S. passenger traffic was an estimated 715.7 million people in 2010, up 1.2 percent from 2009.
Global airline traffic rose an estimated 5.3 percent, analysts said.
The Boyd Group said 2011 won't see strong passenger growth - less than 2.5 percent, at best.
"The recession is not over," the Evergreen, Colo.-based consultants said. "Regardless of the pap coming from Washington, unemployment and underemployment are not significantly improving. ... Taxes are going up - that means less discretionary dollars and less business travel. ... Fuel is going up."
Airlines are hoping to combat the domestic trends by taking advantage of international growth opportunities.
American Airlines, which employs 7,000 people at Tulsa International, lost $471 million or $1.41 per share in 2010 while capacity growth was up 1 percent.
American and other U.S. carriers anticipate future growth and revenue will be in international markets.
In 2011, American will begin joint business agreements with its Oneworld global airline alliance partners British Airways, Iberia and Japan Airlines.
American executives said earlier this month that the Oneworld agreements and the strengthening of its "cornerstone" markets of New York, Miami, Chicago, Dallas-Fort Worth and Los Angeles could provide the company $500 million in revenue in the next year.
In 2010, while American's domestic traffic rose 0.7 percent, international traffic increased 5.6 percent - including 15.7 percent growth in the Pacific.
The trend hasn't escaped notice by the aircraft manufacturers.
Boeing Co., in its "Current Market Outlook 2010-2029," forecasts delivery of 30,900 airplanes valued at $3.6 trillion over the next 20 years.
Much of that growth is expected in the Asia/Pacific region, Boeing said.
"With China and India leading the growth among emerging markets, the region's economy will grow at a rate of 4.6 percent per year for the next 20 years," Boeing's forecast says.
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