Airlines roll out the red carpet for travellers

Desperate times require desperate measures and the global airline industry is no different.
With the International Air Transport Association (IATA) pointing out in its latest report that global passenger demand for travel fell by close to three per cent in July this year as compared to the same period last year, international carriers are looking at wooing fliers back with a variety of sops. Discounts of up to 50 per cent for business and first class fliers and creating new zones within the economy class are some of the schemes being tried.

The Air France-KLM combine, for instance, is soon going to offer a new travel option product for its customers. “On the Air France aircraft, we will have a new class between economy and business called Premium Voyager. In terms of pricing, it will be positioned between the economy and business class tickets. On KLM aircraft, there will be no separate class but there will be a separate zone within the economy class,” said Mr Erik F. Varwijk, Executive Vice-President, Air France KLM.

The separate zone will come with wider seats and more privacy for fliers. The new product will roll out in November on Air France aircraft, while the entire KLM fleet will be converted to accommodate the new zone by December.

Through this move, the Air France-KLM combine is hoping to target two segments of its fliers. The first is the corporate customer who wants to save costs and the second is the leisure traveller who, according to Mr Varwijk, “desires a bit more luxury than economy.”
Malaysia Airlines is wooing passengers through its Economy Plus scheme and business class “buy one, get one free” offer. The Economy Plus scheme allows a passenger to travel in business class on a confirmed basis at fares which are 30-50 per cent lower than what a normal business class fare will cost. “This product has been specifically designed to promote travel during these bad times,” Malaysia Airline’s Regional Manager, Mr Azahar Bin Hamid, South Asia, told Business Line.

British Airways, on the other hand, is offering a discount of 25 per cent to its business and first class travellers. Bookings for this scheme are open only till the end of the month and out-bound travel must be completed by December 31. The tickets, however, are valid for a year.

Source:
The Hindu Business LineDate-31 August 2009Edition- New Delhi http://www.thehindubusinessline.com/2009/08/31/stories/2009083151680100.htm

British Airways offers discount to travelers

British Airways has announced 25 per cent discount offer for its first and club world passengers travelling from India to London, Europe and the U.S. The special fares are valid for sale up to August 31 on flights from five cities in India on flights from New Delhi, Mumbai, Chennai, Hyderabad and Bangalore.

Source:

The HinduDate-29 August 2009Edition- New Delhi http://www.hindu.com/2009/08/29/stories/2009082951821400.htm

Air traffic shows improvement in July

Amid the current economic downturn and the outbreak of swine flu, the global aviation / airlines industry continues to remain in "intensive care", the IATA said on Thursday even though air passenger traffic showed an improvement in July, mainly due to deep discounting. The passenger traffic for July declined by 2.9 per cent compared to the same month in the previous year.

Source:
The Indian Express
Date-28 August 2009
Edition- New Delhi

Air India plans low-cost flights in high-density domestic sectors

The ailing Air India hopes to shore up its revenues by launching low-cost operations in high-density sectors which may include some of the busiest routes across the country, such as Delhi-Mumbai. “The airline may start its low-cost operations on the Delhi-Mumbai route. Some capacity will be transferred from the existing domestic operations on to this route,” said Air India executive director Jitender Bhargav. While the airline has almost identified certain high-density sectors, it is finalising the appropriate time slots at which the low-cost operations could take place. It is also exploring the north-eastern sector where low-cost travel could be offered. The announcement is likely to be made by September-end, coinciding with the festival season. The airline is under considerable strain as its losses are mounting and the aviation scenario is deteriorating due to dipping passenger traffic.

The airline is likely to deploy its older fleet on these routes, said Bhargav. Air India had earlier announced its plans to launch domestic low-cost operations through its international low-cost arm, Air India Express. The carrier will launch its low-cost domestic operations with 27 per cent of the domestic capacity from mid-September and increase it to 80 per cent later. “This will improve our bottomline. We expect to benefit by Rs 180-200 crore,” Arvind Jadhav had said earlier. The airline currently offers between 37,000 and 40,000 seats daily on the domestic sector. The low-cost services will be started with 10 aircraft. These measures are part of the turnaround plan that the company has chalked out for itself to come out of the red and increase revenues.

Low-cost flying has become the new buzzword in the aviation industry as flyers turn to lower fares after a global slowdown hit the industry and pulled down traffic figures. Currently, low-cost carriers carry 53 per cent passenger load on the domestic sector. Internationally too, low-cost flying has seen an upsurge as carriers like Air Arabia, Lion Air and the UAE government-backed Fly Dubai have entered the market.
Source:
The Indian Express
Date-26 August 2009
Edition- New Delhi
http://www.indianexpress.com/news/air-india-plans-lowcost-flights-in-highdensity-domestic-sectors/507065/

Air India to convert several business class flights to all-economy

Air India, the flag carrier operated by National Aviation Co. of India Ltd (Nacil), will replace several of its West Asian flights that offer business class travel with all-economy flights of its discount carrier in an attempt to reduce costs and increase revenue.

Business class travel has been declining globally amid an economic slowdown, according to numbers released by the International Air Transport Association, an airline lobbying group. Global travel on premium tickets declined 23.8% in May from a year earlier; economy travel was down 7.6% in the same month.

“There is hardly any business class required (in West Asia),” said an Air India official, who didn’t want to be named. The carrier’s low-cost affiliate, Air India Express, operates 186 flights a week between India and West Asia and South-East Asia. The airline will increase its services to West Asia to make up for the flights Air India plans to pull, said a government official who asked not to be named.

Mint couldn’t immediately ascertain the number of flights and destinations involved in the route rationalization plan. Air India has committed to undertake an overhaul of its business operations, restructure its massive Rs15,241 crore debt, raise funds through a public offering in fiscal 2011 and convert three out of four of its flights into low-fare services.

Air India Flights and the erstwhile Indian Airlines were united under Nacil in 2007. The flag carrier continued to fly several sectors in West Asia and South-East Asia with Indian Airlines’ IC code. Some of the West Asian sectors will be now serviced by Air India Express. Flights such as Amritsar-Sharjah, Lucknow-Sharjah and those from Kochi and Kozhikode connecting destinations in West Asia may be handed to the low-cost carrier to operate.

Air India Express will also return three leased aircraft from its existing fleet of 22 Boeing 737-800 jets. With the same number of new aircraft to be delivered by Boeing Co. over the next three months, the fleet size of the subsidiary will remain at 22. The discount carrier is also set to start domestic discount services from next month with 10 Airbus SAS-made A320 aircraft.
Ahead of Air India Express’ September launch of its domestic services, Jet Airways (India) Ltd said on Thursday that its all-economy service, Jet Konnect, would increase flights on domestic routes from 135 to 180 daily between 3 September and 1 October.

The additional flights would be those operated previously by Jet Airways with aircraft that offered business class seats, besides economy. Jet Airways chief executive officer Wolfgang Prock-Schauer said in a statement that the move was in response to “strong demand for Konnect services on these domestic routes”.
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Source:
Mint
Date-21 August 2009
Edition- New Delhi
http://www.livemint.com/2009/08/20232026/Air-India-to-convert-several-b.html?h=B

Domestic airlines see rise in biz class travellers

There has been an uptick in the number of business class passengers carried by Jet Airways and Air India (domestic) on their domestic flights in recent times. Frequent fliers on Kingfisher have noticed a similar trend. So are domestic airlines seeing a turnaround in their fortunes?

“The number of passengers being flown in business class in the domestic skies is growing. When we compare July over June, we see an increase in the number of passengers carried in business class. But it is still too early to say that a recovery is taking place,” said Mr Sudheer Raghavan, Chief Commercial Officer, Jet Airways.

Air India (domestic) too has seen an increase in domestic business class travel which in some sectors is almost 50 per cent higher than what was being flown earlier, senior airline officials said.

“On the long haul domestic sectors such as Delhi-Chennai, Delhi-Coimbatore and Delhi-Bangalore, there has been an increase in the number of passengers flying in business class during the past few weeks,” an airline official said.

The increase in business class travellers is being attributed to several schemes such as ‘Spouse flies free’ and the ongoing ‘Monsoon magic’ promotion by the airline which offers a business class ticket for as low as Rs 9,500, sources indicated.

Jet Airways, which in a shift of focus to all-economy class low cost sub-brand Jet Konnect, had reduced its business class seats by 25 per cent in July. However, the airline has seen a 10 per cent increase in the number of passengers flying in business class on its full service brand Jet Airways.

Airline officials say that increase in business class passengers will have a positive impact on the bottomline. Jet primarily uses the Boeing 737 aircraft to operate domestic flights.
It has 48 such aircraft in which the business class seats vary from 16 of the 112 seats offered on the Boeing 737-700 to 24 of the 144 seats offered on the Boeing 737-800. The airline also operates the Boeing 737-900 aircraft which has 28 of the 160 seats in the business class. Air India’s domestic operations are largely carried out on the Airbus A-320 family with the Airbus A-320 having 24 business class seats out of the total capacity of 144.

Source:The Hindu Business LineDate-17 August 2009Edition- New Delhihttp://www.thehindubusinessline.com/2009/08/17/stories/2009081751330100.htm

Jet Airways to add to low-cost operation

Private carrier Jet Airways will be converting about 70 per cent of it overall fleet size into its low-cost arm, Jet Konnect, company officials said. It's also planning a fare hike by the end of the year.

“At present one-third of our overall fleet is being used for Jet Konnect but we plan to convert two-thirds of it to Jet Konnect by October,” said K G Vishwanath, Senior General Manager, MIS & Investor Relations. Jet’s AGM was held at the carrier’s Mumbai headquarters on Monday. According to Vishwanath, the carrier is also looking towards re-leasing its Boeing 777s whose leases are about to be expired in the near future. Of the 10 Boeing 777s that Jet currently has, seven have been leased out to different carriers (four to Gulf Air and three to Oman Air) from which Jet earns about $2.2 million annually, sources said. “The carrier is also looking at a price hike by end of this year, although the quantum of the price hike has not yet been decided,” a Jet Airways official said not wishing to be named.

Officials said that the carrier’s chairman Naresh Goyal emphasised on reduction in input costs and as a result a renegotiation of contracts with the airline’s vendors. Jet’s reported annualised figures mentioned costs savings of between Rs. 350-400 crore for financial year 2008-09 and the carrier is currently aiming at reducing its input costs by Rs. 300 crore for the current financial year.

A Jet official also said at present if the number of combined seats being sold under the Jet Airways and JetLite brand are to be taken into consideration then the figure is already touching the 70 per ent mark. The carrier has a total fleet size of 85 aircraft. It had launched Jet Konnect in May this year with a capacity of 20 per cent of its overall existing seats (excluding JetLite). The airline has dedicated two of its 175 seater Boeing 737-800 and six ATRs to initiate initial operations with Jet Konnect

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Source:
Indian ExpressDate - 18 August 2009 Edition - New Delhi

Air India unveils turnaround plan

State-run carrier Air India on Friday announced revival plan as per which the airline would make a turnaround within 24 to 36 months.“Air India Flight is undertaking a turnaround programme for 36 months and focussing on low-cost carrier for high density ports from September,” said Air India Chairman Arvind Jadhav, adding, “We are planning to create a subsidiary for MRO, ground handling and cargo unit.” Explaining the reason for creating a subsidiary for MRO, ground handling and cargo unit, he said: “It would lead to almost two-thirds of the 32,000 staff going out of airline operations, thus lowering the aircraft-to-employee ratio to match global standards.”

“Ground-handling subsidiaries of Lufthansa and Singapore Airlines account for almost 40 per cent of revenue of the parent company, whereas we currently earn only two per cent,” Jadhav informed. The national carrier will not only be launching a domestic low-cost airline from mid-September, but also re-evaluating aircraft purchase and financing processes.

“Air India Express will launch its low-cost domestic operation from mid-September on 27 per cent of Air India’s existing routes, that were not profitable and ten additional aircraft would be deployed for this purpose,” said Jadhav, adding, “Air India would gradually shift 70-75 per cent of its existing domestic operations to Air India Express.” The airline is expected to earn Rs 180-200 crore through its low-cost operations on the domestic sector, which would improve its bottomline.

Global aviation industry is passing through a very difficult phase owing to recession and India is no exception. Air India, which has over the year lost its market share, is expected to lose over Rs 7,000 crore this year. The carrier is also overburdened by its working capital borrowings worth Rs 17,000 crore.

Jadhav said that the airline would have to go for cost-saving measures, which will be painful. “We have got into a cash-flow problem. We are unable to service our interest and debt liabilities with our internal resources,” Jadhav added.

Air India has made a presentation to the Government on the need for equity infusion and soft loan as the airline is facing Rs 60,000 crore debt. “We have made a presentation to the Government and it is carrying out a financial analysis. It is up to them to decide as to how much money we need,” he said. The airline also said it would go for an IPO in the next 18 months.
Source:The PioneerDate-8 August 2009Edition- New Delhihttp://dailypioneer.com/194505/Air-India-unveils-turnaround-plan.html

Air India Express to launch low-cost domestic operations from September

Air India Express will launch its low-cost domestic operation from mid-September connecting the metros and 20 other cities. "We will launch the low-cost service of Air India Express on domestic routes from mid-September," a NACIL official told PTI today.

The low-cost service would initially be operated from 24 cities with a mix of both metro and non-metro routes, the official said, adding the service will have 161 flights a week.

Air India Express is the budget arm of national carrier Air India which operated on routes from cities in India to South-East Asia and the Middle-East. Though a low-cost service, light refreshment would be served to passengers on board, the official said.

Source:
The Pioneer
Date-7 August 2009
Edition- New Delhi
Appeared on Pg 10

Air India to convert 10 jets for low-fare flights

India’s flag carrier, Air India, is converting 10 Airbus aircraft to an all-economy class configuration as it prepares to start its domestic low-fare operations under its Air India Express brand by mid-September, two airline executives said.

Air India, run by National Aviation Co. of India Ltd, currently operates Air India Express as its international low-fare carrier. Its entry into the domestic low-fare aviation market could further lower ticket prices.

Rival full-service carriers Kingfisher Airlines Ltd and Jet Airways (India) Ltd, India’s largest private airlines, have already shifted at least half their fleets to all-economy flights as they fight competition from discount airlines such as SpiceJet Ltd, InterGlobe Aviation Pvt. Ltd-run IndiGo and Go Airlines (India) Pvt. Ltd-run GoAir.

“A decision has been taken to convert old aircraft to all-economy class and they will fly under Air India Express,” an Air India official said, asking not to be named.

The 10 aircraft to be converted date back to between 1989 and 1994 and have 148 seats each. Over the next two months, these will be redesigned to have 168 seats, he added.

The conversions will take place at the Mumbai and New Delhi airports, two key bases for the carrier. To start with, seven aircraft will be converted and tickets can be purchased from the Air India Express website.

“It’s (launch) is aimed at middle of September,” said another official, adding that the exact date would depend on the time taken to reconfigure the aircraft.

Typically, aircraft that undergo a change in configuration or are retro-fitted have to be recertified by the manufacturer, in this case Airbus SAS, if there is a drastic change in the specifications, he said.

For the new domestic service, Air India will pull out its full-service domestic flights on some routes to accommodate the low-fare flights, the official said.

For example, an afternoon slot on the Delhi-Mumbai route, which may not be in high demand from business-class fliers, will be allotted to Air India Express.

Air India flies 57 of its 147 aircraft on domestic routes and has seen its passenger market share scroll down to 17% now from 20% in 2006-07.

But unlike Jet and Kingfisher, who are trying to regain corporate passengers who have migrated to low-fare airlines because of company policy, Air India can benefit from this model only if it cuts overall costs, said an analyst tracking the Indian aviation sector.

“If this is one element of a much more comprehensive revamp, then aggregate of all that may make a difference. But this move in itself may not have a big impact,” said Rishikesha T. Krishnan, professor of corporate strategy and policy, Indian Institute of Management, Bangalore.

“You are not going to see major expansion of the (passenger) market. Air India can only hope that they will get a slice of other LCCs (low-cost carriers).”

Source:
Air India to convert 10 jets for low-fare flightsMintDate-7 August 2009Edition- New Delhihttp://www.livemint.com/2009/08/07004207/Air-India-to-convert-10-jets-f.html?h=B

Etihad to fly to more Indian cities

ABU Dhabi-based Etihad Airways is looking at a major expansion in India. To begin with, the national airline of United Arab Emirates (UAE) will increase its weekly flight frequency to 45 by the year-end from the present 38 flights.

As part of this plan, the carrier has announced four flights per week from Hyderabad. The flights will begin from November and will operate daily beginning next year. The airline will also add more Indian cities to its list of six destinations.

"We are focusing on our network growth. The traffic growth from India is tremendous. The traffic in all segments including corporate, leisure and even students has grown significantly in the recent past," Neerja Bhatia, country manager (India and Sri Lanka), Etihad Airways, told Financial Chronicle. At present, Etihad operates 38 flights a week from Abu Dhabi to Mumbai, New Delhi, Thiruvananthapuram, Kochi, Kozhikode and Chennai.

The airline's expansion comes at a time when almost every airline in the world is struggling hard to manage load factor and margins. Bhatia said the carrier would further expand its operations depending on the aviation ministry's approval in India. "We have applied for the civil aviation ministry's approval to fly to more destinations from India. One city that we want to add immediately is Bangalore.

There are continuous talks with the Indian aviation authorities. We have got a lot of support from them,"Bhatia said. The airline, however, may have to wait before it adds more Indian destinations to its list. The ministry of civil aviation is going very slow on bilateral agreements to award additional traffic rights to foreign carriers to help domestic carriers who are having tough time with declining demand and high aviation turbine fuel (ATF) prices.

"We have received requests from several foreign carriers to increase frequencies from India. However, we will go slow on bilateral agreements. Our own carriers are struggling with the low traffic. Allowing more foreign flights will make it even tougher for them to fly," a senior ministry official, who did not want to be named, said.

The number of flights operated by foreign airlines has increased around 85 per cent in the past five years. While in 2004, foreign carriers operated 711 services per week to and from India, in 2009, the number touched 1,315.

Source:Etihad to fly to more Indian citiesFinancial ChronicleDate-7 August 2009Edition- New Delhi Appeared on Pg 6