News Breaks


Friday, July 25, 2014

Etihad-Jet Affirm Plans for Growth, Profits


Etihad CEO James Hogan (right) and Jet Airways chairman Naresh Goyal meet in New Delhi. (Photo: Neelam Mathews)
July 24, 2014, 11:12 AM
India’s loss-making Jet Airways and its new 24-percent owner Etihad Airways are formulating plans for restructuring debt and fleet rationalization for enhancing a full-service branding. Jet, reporting $689 million in declared losses last year, expects to show profits by 2017, founder and chairman Naresh Goyal said at a July 23 press conference in New Delhi.
A slowed economy, infrastructure constraints, and rupee depreciation have in the past years resulted in massive losses for airlines in India. Nevertheless, Etihad Airways president and CEO James Hogan ruled out any exit strategy. “This is not an overnight turnaround,” he said. “It’s a structured rebuilding process…We have a responsibility to shareholders of the company…for return to sustainable profitability.” Meanwhile, competition continues to grow ever more fierce. For example, AirAsia India recently started operations and Tata-SIA plans to launch services in October. Six airlines in total recently have obtained a No Objection Certificate, and these stand to further confound the demand and supply mismatch.
“It’s been tough over recent years. Our international operations are already profitable and contribute 45 percent to our total revenue,” said Jet Airways CEO-designate Cramer Ball, former CEO of Air Seychelles, an airline in which Etihad owns a 40-percent stake. Jet Airways is expanding fast to international destinations through code-sharing pacts and services to Ho Chi Minh City starting in November and to Kuala Lumpur, Yangon, and the Seychelles by March 2015. The company has signed a code-share deal with Alitalia, in which Etihad will soon acquire a 49-percent stake, potentially creating an unconventional fourth major global alliance. “You could say that,” Hogan told AIN. “Already we have network strength.”
Etihad and Jet have begun to realize cost savings and synergies in areas such as fleet acquisition, maintenance and training, said Hogan. The “alliance” will continue to explore collaborative purchasing opportunities for fuel, spare parts, insurance and technology support, he added.
With plans for growth of its full-service brand set, Jet Airways has entrusted hybrid low-fare/regional affiliate JetKonnect “with bankers for restructuring,” said Goyal. Jet Airways has already started the process of transferring 18 ATR 72-500s and -600s to JetKonnect, an official told AIN. He added Jet Airways pilots have asked for assurance that a common seniority list remains.
Abu Dhabi-based Etihad Airways, which celebrates the 10th anniversary of its inaugural flight to India in September, currently operates 112 weekly services to 10 Indian destinations. During the first quarter of this year, more than 621,000 people traveled on the airline’s India services, representing a growth rate of 51 percent year-on-year, according to Sydney-based consultancy, Center for Asia-Pacific Aviation.

Wednesday, July 23, 2014

India’s Avro Replacement Could Be Problematic

The Airbus C-295 might be the only qualified contender for India’s Avro 748 replacement project. (Photo: Airbus Defence & Space)
July 22, 2014, 2:50 PM
The new Indian government has re-issued the request for proposal (RFP) for 56 transport aircraft worth an estimated $2 billion, to replace the Indian Air Force’s aging Hawker Siddeley 748M twin-turboprops, known as Avros. The final date for submission of bids is August 28. The contract is expected to be awarded in late 2015 or early 2016.
The candidates will likely include Alenia with the C-27J, Antonov with the An-32, and Airbus Defence & Space with the C-295. However, a decision on whether Alenia can bid is pending, after the controversial sale of AW101 helicopters by fellow Finmeccanica subsidiary AgustaWestland was halted. There are also concerns about Antonov, from war-torn Ukraine. Should the C-295 end up as a sole bidder, the project might be shelved unless the Indian Air Force seeks special approval from the MoD.
This is India’s first private sector-only project, in which government-owned companies cannot be a lead partner. In this case, Hindustan Aeronautics Ltd (HAL) can be a tier-one supplier, but it will not be the so-called Indian Production Agency (IPA). The successful bidder is to deliver 16 aircraft in flyaway condition in 24 months and manufacture 40 in an Indian partner’s facility by 60 months, with all to be delivered within 120 months of contract signature.
An electronic warfare suite to be integrated on the aircraft includes Bharat Electronic Ltd radar warning receiver and missile approach warning system and Bharat Dynamics Ltd counter measure-dispensing system. Tooling, the responsibility of the OEM, will include jigs, fixtures, assembly, comprising 60 percent of the aircraft. Engine and avionic parts will be imported.
“It will be a challenge to motivate Indian suppliers who are insisting on an order of at least 200,” a manufacturer told AIN. He added that the manufacturing facility funded by an OEMwith large pockets could open the way for an export industry. “The Avro replacement could be a prelude and follow in the footsteps of the Ruag production model for the Dornier 228 that, except the engine, is outsourced from India,” he said.

Tuesday, July 22, 2014

AME education- Is it worth it? Time for the Govt to take a call?

Neelam Mathews
July 21, 2014

There are some things that are seriously wrong with our industry and one is surprised how they never get pointed out.
I got this story by default. Thanks to social media, I got an SOS from a young man requesting help to be introduced to some MRO companies to keep him as an intern for 6 months which he is willing to do without a salary. Such is the structure of the curricula that without the training at a maintenance facility, he doesn't get a certificate. So far so good, but, now we get into murky waters. MROs at airports are not allowed to take on trainees unless they are hired as technicians "due to security issues." So the same person can enter the airport as a technician -literally forcing companies to fool with books- but not as a trainee as that makes him a security risk! Really!
Why have such a course? Or even better, why not start to update it? We hope the new dynamic minister of education is listening.
We are also hearing that some PSUs are charging the interns for giving them the honor of the experience. This, ofcourse, leaves the have- nots with little choice but getting into debt.
So, what if the young guy who connected with me does not get the internship? He goes back to Class 12, losing 3 years in the bargain as the AME course does not offer any credit for graduation, or, he  ends up selling pakoras on a rainy day. An official cautions: "Its a bad time to enter the business. There are around 5000 students graduating from some 40 institutes a year in India, and just around 25% are absorbed as the industry is not growing."
While these students could be absorbed into the IAF following large offsets committments that include MRO, internal dynamics will need to change. Presently, the IAF takes on 18 year olds and makes them go through a 3-year training before inducting them as airmen. "The talent is available- these tech guys are already well trained. Why can't they be absorbed into the IAF,?" queries an official.
The MoD must make a call on this before we have more frustrated youth on our hands. Anybody listening?

Saturday, July 19, 2014

Is it Tata Airlines or its Corporate JeT?

Neelam Mathews
June 19, 2014

JRD might be smiling benevolently from where  he is resting. A picture released on twitter shows perhaps the very first look at India's Tata (Airlines) (Tata-SIA), the new name as it appears on the aircraft in blue and white colors? As somebody remarked: "Looks like their corporate jet colors." So unless they have bought an A320 as a corporate jet, this could be the new face of the airline.

The decision on the name - if it is so- is a move away from SIAs trend to brand its subsidiaries with names like SilkAir and Scoot. But then, Tata Airlines is no subsidiary! The branding is clear- you can identify it from as far as the eye can see. And history repeats itself, except that the choice of aircraft is different from the time the Tata's ran a postal service in the last century.

Congratulations, either way! We as Indian citizens have a lot of expectations. Hopefully, they won't be misplaced.

Exclusive! Who is merging with whom in Indian aviation?

Neelam Mathews
July 19, 2014

If you thought the end of losses for airlines operating in India was history, you might want to think again. So volatile is the situation that with the possible start of giant Tata-SIA soon, even Jet-Etihad has realized it cannot be silent anymore. A press briefing called next week will have both Naresh Goyal and James Hogan addressing us mere mortals. Don’t bash me up for this, but besides the fact they are expected to inform us on how the India market figures in their strategy, we are hearing a buzz that they might even announce the acquisition of a large ailing budget airline (SpiceJet?) that is suffering from TDS and service tax payment defaults. However, AerospaceDiary could not confirm this.  Just reporting a buzz! Moreover, that is where, we suspect a blog differs from a newspaper report. Taking a bit of editorial leverage here!
Air India has joined Star Alliance and that might give it a temporary relief as it adds more codeshares to its portfolio- read- more revenue. While this may not be viewed by competitors as something that eats into their business, today, every morsel counts. Let us look at the aviation scenario that the budget chose to ignore. Barring those 200 airports, which could give the regional airlines a push- if there was a policy!), God alone knows, when both will see the light of day.
We are also hearing another airline, Air One, has got its NOC. So, another issue to add to the woes of Indian aviation. Does that reaffirm our theory of consolidation in the business? We think so.

ANS calls for clarity as new Indian government sets priorities

Neelam Mathews - IHS Jane's Airport Review
17 July 2014
The incoming BJP government led by Narendra Modi must surmount a number of aviation obstacles
Even as the Indian Parliament prepares to clear the creation of an independent Civil Aviation Authority to replace the Directorate General of Civil Aviation (DGCA), the corporatisation of Air Navigation Services (ANS) is top on the list of the new Prime Minister Narendra Modi's 100-day agenda.
Other immediate plans include establishing low-cost airports.

Some aviation insiders harbour serious concerns about ANS corporatisation. Subit Kobiraj, president of the CNS [Communication, Navigation and Surveillance] Officers Guild, described "grey areas" in the implementation plan - and IHS Jane's has seen a letter dated 4 July, addressed to the AAI Member ANS from Shamsher Singh, general secretary of the ANS Guild. more on Janes Airprots Review

Friday, July 18, 2014

MAS loses second 777 this year

Media Statement : MH17 Incident

Released at 12:30am/18 July 2014
Malaysia Airlines confirms it received notification from Ukrainian ATC that it had lost contact with flight MH17 at 1415 (GMT) at 30km from Tamak waypoint, approximately 50km from the Russia-Ukraine border.
Flight MH17 operated on a Boeing 777 departed Amsterdam at 12.15pm (Amsterdam local time) and was estimated to arrive at Kuala Lumpur International Airport at 6.10 am (Malaysia local time) the next day.
The flight was carrying 280 passengers and 15 crew onboard.