1. Air India pilots seek minister's intervention in resolving problems
A section of Air India pilots today sought intervention of civil aviation minister Vayalar Ravi, saying the airline management was "not serious" about addressing their concerns and trying to precipitate industrial action.
The Indian Commercial Pilots Association (ICPA), which was called for a meeting with Air India CMD Arvind Jadhav in Mumbai today, is understood to have shot off a letter to the minister after the meeting failed to take place and sought his intervention in the matter.
While the ICPA represents pilots of the erstwhile Indian Airlines, the Indian Pilots Guild represents the cockpit crew of the erstwhile Air India.
Alleging that the CMD did not meet their representatives as scheduled "despite being present in his office", ICPA sources said it showed Jadhav was "not serious about addressing our concerns and in fact precipitating industrial action against the best interest of the airline".
The ICPA wanted "urgent intervention" by Ravi at the earliest so as to avoid any "unwarranted" industrial action.
The sources said if there was no response from the government, the ICPA could go ahead with serving notices for non-cooperation and other industrial action soon which may affect flights.
Soon after taking over charge last week, the new civil aviation minister had sought the support of all employees of ailing Air India to restore its lost glory and said the staff and the management should work in coordination to achieve this.
2. Fighting for their claims
Dubai: "Will he do something or will the injustice continue?"
That was the question on the mind of Abdul Rahman, a Dubai-based executive who lost his wife and nine-year-old son in the May 2010 Mangalore air crash that killed 158 people, as he prepared to meet Vyalar Ravi, India's new Aviation Minister, in Dubai on Wednesday.
Rahman, who met Ravi along with other UAE-based families of the crash victims, appealed for the immediate settlement of compensation for families of the crash victims in light of the stalemate between them and the airline over compensation.
Memorandum submitted
Rafeeq Eroth, president of the UAE-based Malabar Pravasi Co-ordination Committee (MPCC), said around 30 families in the UAE had sought justice in a memorandum signed by M.G. Pushpakaran, chairman of the MPCC action council for the Mangalore air tragedy. It stated that families wanted compensation to be calculated based on the Montreal Convention 1999. "We understand that by India acceding to the Montreal Convention, the dependents of the victims are legally eligible to get $140,000 (Dh514,220). In case it's the fault of the airline, relatives can claim more than $140,000," it said. "In this case, the probe stated that the fault is of the Air India pilot."
Air India and insurance agents wanted dues to be settled based on victims' incomes, but the memorandum stated it would be difficult to arrive at the exact income, as the salary mentioned in labour contracts is "much lower than what the victims were actually drawing". Many were part of businesses operating under the sponsorship of Emiratis "without any proof of ownership to the deceased."
3. India's MRO industry to be worth $1.5 billion by 2020
NEW DELHI: India is poised to become the fastest growing market in the world for aircraft maintenance, repair and overhaul (MRO) services over the next decade tripling its worth to $1.5 billion, as airline companies buy more planes to cater for the country’s rapidly growing traffic.
“The MRO spend by airlines in India now is $500 million and is expected to grow to $1.5 billion in 2020. As a result, we expect significant investment to come into this space over the next 10 years,” MRO services provider Air Works managing director Vivek N Gour said.
Industry experts have estimated Indian air traffic will triple to 362 million passengers by 2021-22, by which time the country’s air carriers would have more than doubled their fleet to about 1,000 aircraft.
Experts also estimate that MRO revenues, a direct function of the number of aircraft, are growing at a compounded annual rate of 15% in India, which makes this space attractive. The MRO space is a $45-billion market globally, of which India constitutes only 1%.
But, according to global consultancy firm KPMG, over the next decade India is going to be the leader in this space, which is currently split between North America and Western Europe, because of higher economic growth rate that the country is going to witness.
“The fleet size in India is now reaching a critical mass where it makes sense to have a strong MRO space not just for the domestic fleet but also for international airlines. Growth of MRO in India is now a necessity than an option,” KPMG director (aerospace and defence) Amber Dubey said. Moreover, India will have no dearth of skilled manpower and has the advantage of its good geographical position, he added.
While large carriers like Air India , Jet Airways and Kingfisher Airlines have their own or captive MRO facilities, several aircraft from India are sent to Europe, Middle East or South East Asia for major maintenance. The low-cost carriers are especially dependant on this kind of outsourcing.
In that sense, the clear benefits for domestic airlines in availing MRO services offered in India include cost advantage and faster turnaround time. “Also, India has the unique advantage of being within 5 hours flying distance from the Middle East and South East Asia, which allows it to tap into a larger market,” Gour added.
According to Ernst and Young, the MRO business is expected to tilt towards the Asia-Pacific region as almost 40% of the total air traffic is likely to be from or within this area. “The opportunity and the challenge for India is to position itself as a competitive regional MRO hub serving the broader Asia Pacific region through the advantages of faster turnaround time, a rich pool of engineering expertise and lower labour costs,” Ernst and Young Partner (Infrastructure Practise) Kapil Arora said.
However, the industry points out to a few issues that needs to be addressed in order to help facilitate growth in this space. From an MRO perspective, the import of spares into India is subject to both Custom duties and rendition of service is subject to levy of service tax. “This reduces competitiveness of the sector compared to its global peers based out of the Middle East or South East Asia,” Gour said.
Globally recognised certifications from the Federal Aviation Administration (FAA) or the European Aviation Safety Agency (EASA) are also imperative for players to cater to this market. “The government could help the sector by creating an MRO policy, assisting in land acquisition near existing airports and streamlining issuing of clearances from the DGCA , to begin with.
4. Jet Airways may join SkyTeam or Star Alliance
The country’s largest airline by passengers carried, Jet Airways (India) Ltd, plans to join international airline groupings SkyTeam or Star Alliance. The airline is also considering rebranding its low-cost carrier JetLite.
Jet, with a 115-aircraft fleet, has been expanding overseas since 2007 and an alliance with one of these groupings would help it grow its reach and revenue by about 5%, according to analysts.
The choice is limited though. Of the three global alliances, Air India is integrating into Star, the biggest, this year, and Kingfisher Airlines is joining OneWorld.
The aviation ministry does not want two major airlines in the same alliance, which would leave SkyTeam as Jet’s only option.
“OneWorld is already with (Kingfisher) so its has to be between Star and SkyTeam,” Jet Airways chairman Naresh Goyal said last week on the sidelines of a conference marking 100 years of flight in India. “But we are not in a hurry. Emirates has not joined any alliance, has it?”
Jet connects to 24 international cities, second only to Air India’s network, and has been stitching code-share agreements with international carriers to increase its reach.
While Goyal says Star is an option, the aviation ministry is opposed to that move, at least for now. “We can’t allow two carriers into an alliance. They will eat into each other’s market and cannibalize it,” said a ministry official who declined to be named.
If Air India and Jet both join Star, the national flag carrier’s negotiating power on ticket prices with alliance members such as Lufthansa may decline as there will be two carriers from the same country, the official said.
In December, the Mumbai-based Jet started flights to Milan from Delhi, a sector vacated by a loss making Alitalia in 2008, and entered into a understanding with the Italian carrier for handling its flights.
Alitalia is a SkyTeam member and 25% controlled by another SkyTeam member Air France-KLM.
Italy was the first new front Jet opened in Europe after it made Brussels its European hub way back in 2007.
The aviation ministry official said the government is modifying a bilateral agreement between India and Italy to allow Jet to sign a domestic code share agreement with Alitalia.
Such an agreement will allow Jet to book passengers on the Delhi-Naples route, flying them on its aircraft till Milan and on Alitalia from there.
This month, Jet also won rights from the aviation ministry to expand further into what are considered SkyTeam hubs in Europe. It secured, as Mint reported on 23 January, rights to fly to Rome and Amsterdam from Mumbai in the coming winter.
“Jet is clearly joining SkyTeam since FCO (the Rome airport code) and AMS (Amsterdam) are Alitalia and KLM hubs. Jet can (fly to) Britain (excluding London) via AMS and other cities in southern Europe via FCO or MXP (Milan airport),” said a London-based analyst who tracks the airline closely, but declined to be named as he is not authorized to speak to the media. Jet already flies direct to London using Boeing 777s.
“They will also start flying to CDG (Paris airport and a large SkyTeam hub). I expect Jet will pull out of BRU (Brussels) soon and use MXP as their scissor hub,” he said.
Jet did indeed request the aviation ministry last year to be allowed to fly to Paris from the winter of 2011, but that route was kept in abeyance by the ministry. Air India already flies the Delhi-Paris route.
The airline can benefit from being a a dominant carrier in SkyTeam as it doesn’t have any major member airlines in West Asia and Southeast Asia, where Jet has a presence since it has been increasing frequencies to these regions since 2007. The two airlines in these regions who are slated to be part of SkyTeam include Saudi Arabian Airlines and Indonesia’s Garuda.
Goyal, who controls about 80% of Jet Airways through Isle of Man-based firm Tail Winds Ltd, also said the airline plans to rebrand its budget subsidiary JetLite as JetKonnect to lift the carrier’s image and positioning.
He, however, denied the airline was in talks with French aircraft maker Airbus SAS to refurbish JetLite’s fleet with Airbus A320 aircraft or the newer version of fuel-efficient Neos that will debut in 2016.
“We are with Boeing,” he said, referring to Jet’s fleet being dominated by the American-made Boeing 737s.
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