Neha Jain: http://indianairlinesnews.blogspot.com/25

1. Air India turnaround team breaking up, Sukumar quits

Air India’s board is likely to approve the airline’s turnaround plan in mid-March but the team that is supposed to effect the turnaround is in the process of being dismantled. While the COO of the low-cost Air India Express was asked to leave a few days ago, chief training officer Stefan Sukumar has put in his papers – his resignation is yet to be accepted.
Air India COO Gustav Baldauf, who was appointed by Praful Patel after a search committee recommended his name, is also in trouble. Angered by not being given a free hand, and his appointments being challenged, Baldauf has given interviews saying there was a lot of politics going on. The aviation ministry has asked Air India for a written explanation for the media interviews. Baldauf has told colleagues about the various job offers he has, clearly signalling he is fed up.

2. Air India board to review revival plan next week

MUMBAI: Air India's revised turnaround plan for its revival is likely to be submitted before the national carrier's board for approval next week, said an Air India official directly in the know of the matter.

The plan, vetted and modified by consultancy firm Deloitte Touche Tohmatsu (India), proposes focus on domestic routes as the best option to regain lost market share. The national carrier's domestic market share slipped to 15.8% in January from 17.1% in December last year. Deloitte, which was hired to vet the plan conceived by the Air India management in October last year, had earlier put forth four scenarios. The consultancy firm had left the choice of the suitable option to the airline's management.

"We did not want the options and the confusion associated with the scenarios presented by Deloitte. So it was best that we got one plan from them. There is 99% agreement on what has been presented to Deloitte by the Air India management after tweaking it," said a top Air India official, not wanting to be identified.

The turnaround plan, which is essentially a five-year business plan, has two parts involving financial turnaround of the airline using equity infusion from the government and operational business plan focusing on fleet size, the routes and ways to gain back the market share, said the Air India official.

For the financial turnaround, it has been accepted that Air India, which currently has a low equity base ( 945 crore), will need to almost double the money from the government that was agreed upon by the committee of secretaries last year. The amount was pegged at 10,000 crore then. Vayalar Ravi, the minister for civil aviation, had hinted recently that Air India needs more than 10,000 crore of equity support from the government.

The government has already pumped in 2,000 crore into the airline and Air India is seeking another 2,000 crore for the next financial year.

"Essentially there is an agreement for 20,000 crore of equity infusion from the government side," the official said. A strong focus on the domestic market to regain market share is what is being seen as the main priority by the airline's brass. For this, fleet expansion is being looked at actively.

Deloitte seems to have agreed that Air India should have 245 aircraft in its fleet by 2017 to capture the market share it has lost to rivals. According to the numbers released by the Indian regulator, despite the fact that airlines carried 4.93 million passengers, a growth of 21% from the same period last year, Air India has slipped to the fourth position. Air India had argued for 272 aircraft by 2015 but this seems to have been watered down by Deloitte.

3. Wipro dreams big from aviation, defence business

Bangalore, Feb 24: One of India's largest software firms Wipro Industries is diversifying to other areas and concentrating on defence and aviation industries. With plans to sell hydraulic cylinders and manufacturing components for aviation and defence in the 3-4 years, the message is loud and clear, they plan to diversify and diversify big. They plan to garner $1 billion from the business alone.

Pratik Kumar, the head of Wipro’s infrastructure engineering division said, “We want to more than treble our cylinder manufacturing capacity and flesh out a more focussed strategy for addressing the lucrative defence offset market.” The engineering division contributes to only a meagre 10% of the group's business. They also plan to establish manufacturing hubs in Brazil and China for their hydraulics business.

Wipro also holds the honour of supplying materials to the world’s biggest maker of construction equipments Caterpillar. In order to further advance their supply, have decided to set up a manufacturing unit in Brazil. They had set up a large unit in Wujin hitech industrial zone in Changzou, China last year. Kumar added, “We are exploring both Greenfield and acquisition route to expand in Brazil, it’s an opportunity we cannot afford to get late in addressing, The economy is growing 7-8 %, and with the Olympics ahead, prospects are looking bright.”

Wipro is going full-steam in its diversification efforts and have received adequate approvals to set up a
defence manufacturing unit at Devanahalli, Bangalore. These attempts might help Wipro counter the many market fluctuations with ease. A Mumbai-based analyst said on the move, “Wipro’s biggest strength is its soaps to software positioning, but our concern is that it should not spread too thin. Also, sectors like defence bring other regulatory risks and long sales cycles.”

4. Royal Jet to enter India’s fast growing luxury private aviation industry

Abu Dhabi-based luxury aviation services Royal Jet is making intensified efforts to enter the fast growing private aviation sector in India at the Indian Business Aviation Expo (IBAE).

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Royal Jet/handout.
Abu Dhabi-based luxury aviation services Royal Jet is making intensified efforts to enter the fast growing private aviation sector in India at the Indian Business Aviation Expo (IBAE).
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The expo, which runs till February 23, is considered an important platform to showcase products and network to officials in the aviation industry in the country.
"IBAE presents us with a unique platform to introduce our business relationship with ASM as we present a new era of luxury private aviation service to the Indian market," said Fahad Wali, Acting Vice President Commercial, Royal Jet.
"As the number of High Net Worth Individuals (HNWI) in India increases at a much faster pace than elsewhere in the world, such an event offers tremendous potential for us to explore promising business opportunities," he said further.
The IBAE event comes at a time when transport analysts and consultants are predicting that approximately 350-400 million Indian nationals will be opting to travel by air annually by 2020. It is for this reason that the industry has increased its attention to develop the luxury aviation sector in the country.
"Indian business executives, entrepreneurs and HNWIs are expected to look for alternatives to get around India's congested airports and seek faster and more efficient time-saving air travel solutions," said Vito Gomes, Founder and Managing Director, Aviation Services Management.

NEHA JAIN

International Airlines Training Expo