Airlines gearing up to fly high on festive fervour

After being hit by fuel price hike and capacity cut, airlines such as Jet Airways, Kingfisher, SpiceJet and IndiGo are adding more flights in the domestic routes, anticipating better demand in the festival season ahead. Vijay Mallya-promoted Kingfisher Airlines is planning to launch six Airbus A321s in the next six months and will be deployed these on around 10 new routes (such as Mumbai-Pune) a day apart from short haul international destinations, sources said.

Besides, the airlines is also planning to deploy ATRs on two new destinations, Latur and Nanded in Gujarat. While Kingfisher is looking at adding at least 15 new flights in the winter season, competitors Jet Airways, SpiceJet, IndiGo and Paramounts are adding over 30 new flights together (arrivals and departures), by a combination of better utilisation of existing aircraft and inducting new fleet, to destinations like Hyderabad, Coimbatore, Chennai, Pune, Goa and Vishakhapatnam apart from smaller destinations like Rajamundhry and Tirupati.

�We have inducted two ATRs (80 seater) and opened three new stations, Rajamundhry, Tirupati and Vishakhapatnam. We also have connected Hyderabad to some of these destinations as well as Pune to destinations like Hyderabad and Hyderabad to Goa,� said Jet CEO Wolfgang Prock-Schauer.


Prock-Schauer said that they are expecting demand to go up in the festive season and is increasing capacity albeit cautiously. �Fares will also increase by at least 10 per cent in this season� he added. The country\'s largest airlines by market share Jet Airways is also planning to launch three more ATRs this year.

These ATRs would be operating nine frequencies. The flights will primarily be in the Southern routes. Company sources said that the airlines would mostly deploy the low- capacity aircraft on domestic routes. Using lower capacity aircraft would lead to improved load factors for the airline. Jet, whose average loads had fallen below 70 per cent during August, expects its loads to go beyond 70 per cent by deploying these flights.

�We saw that most of the capacity decrease was in cities like Hyderabad and Bangalore and those areas were going to underserviced. Hence, we started flights to those cities,� said a SpiceJet executive.

Budget airlines IndiGo, which has already started four additional flights, will start more flights. �We will gradually add more flights in the winter schedule and in October� said Bruce Ashby CEO of IndiGo.

For airlines like SpiceJet, whose aircraft has been lying grounded because of the decrease in flights, this will mean better utilisation of their aircraft.

�Our aircraft utilisation will increase by almost half-an-hour-a-day, due to the added flights,� said a SpiceJet executive.

South Indian premium carrier Paramount Airways also has major plans to increase capacity, albeit to the smaller cities.

The carrier that has connected six southern cities such as Thiruvananthapuram, Chennai, Kochi and Madurai to Ahmedabad will now venture to other cities like Goa and Pune.

�We have plans to go to other western cities like Bhopal, Nagpur, Porbandhar and Bhuj,� said M Thiagarajan, managing director, Paramount.

The carrier\'s total number of daily flights will go from the current 54 to 64 by the end of this year, fleet number will be increased to nine from the current seven.

Kingfisher Airlines seeks Govt nod for importing ATF

New Delhi (PTI): Vijay Mallya-led Kingfisher Airlines has sought government\'s approval for importing the aviation turbine fuel to do away with tax expanses as high prices continue to wreck havoc with the financial health of airlines in the country.

Mallya has written a letter to Petroleum Minister Murli Deora seeking permission to buy jet fuel directly from the international oil majors.

Currently, the cost of ATF in the country is about 60 per cent higher than global prices because of imposition of taxes at various levels. Jet fuel is subject to five per cent import duty by the Centre as well as sales tax by states which range between four per cent and 35 per cent.

The Indian aviation industry is recording significant losses largely due to the steep hike in oil prices and the very high level of taxation on ATF by the various state governments.... In this regard, we are actively exploring the possibility of directly importing ATF which will obviate the need to pay any sales tax, Mallya said in the letter.

Mallya said Kingfisher had submitted the proposal of importing the fuel to the Director General of Foreign Trade. The proposal was referred to the Ministry of Petroleum.

We seek your support for this proposal and request you to appropriately recommend to the Director General of Foreign Trade, he said.

Mallya said importing ATF will help the state governments reviewing their position and ultimately rationalising the taxation structure on ATF.

I believe that this (the move) will help immensely the state governments reviewing their position and ultimately rationalising the taxation structure on ATF. he said.

Domestic airlines will have to improve efficiencies

India is expected to post the largest aviation sector losses (outside of the United States) this year at $1.5 billion on rising fuel bills and slowing traffic growth.

From 33% increase in 2007, traffic growth slowed to 7.5% in between January and June this year and has become negative subsequently.

Airlines look to downsize workforce to stay afloat

No wonder then that the International Air Transport Association (IATA), which represents 230 airlines or 93% of scheduled international air traffic, has prescribed a bitter medicine to cure the ills. Director General and CEO Giovanni Bisignani was blunt when he said on Wednesday that instead of continuing to focus on grabbing market share, Indian airlines need to improve efficiencies to even remain in business.

Airlines bet on softer oil prices

The next months are critical. The industry is sick. I had to suspend 25 airlines from our settlement systems because they went bust.

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Many of these were because they were fighting to grow traffic instead of profit. This is not the time to grab market share. Action on external issues is also required to bring the industry back to health, he said.

Bisignani used some tough words against the government too, pointing out the absence of any action on making aviation turbine fuel (ATF) cheaper despite several representations by the industry.

His demand? The government should take steps to remove the excise duty and reduce sales tax to 4% on ATF, which accounts for as much as half the operating costs for some Indian airlines. It is a wake up call for the ministry of finance, he said.

The IATA chief also noted that at a time when domestic capacity growth is expected to all together stop by the end of the year to cope with mounting losses, infrastructure costs could rise further, causing concern. India does not measure up. There is no transparency in the cost base for either airport or air traffic control.

Our best estimate is that there is a 20% over collection for air traffic control. And charging 33% more for international flights to land than domestic can only mean cross subsidisation as the service is the same.

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Lack of aviation infrastructure at Mumbai was specially noted by Bisignani, who pointed out that since it isn\'t possible to build an additional parallel runway and the greenfield site under consideration cannot be considered a long-term solution, Mumbai needs an airport that can adequately serve the financial capital of the world\'s second most populous nation.

Air India


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Kingfisher to cut 300 jobs

Mumbai: Some low-fare airlines are shedding their no-frills image to attract more business fliers, a segment they see sustaining their operations over the long haul.

Corporate travellers account for more than 70% of passengers flying full-service airlines such as Jet Airways (India) Ltd and Kingfisher Airlines Ltd, the country’s two largest private carriers. These airlines enter into deals with companies to fly their employees, offering special discounts and packages in exchange for assured volumes.

On the other hand, low-fare, economy class airlines see only 50% of their revenues from business travellers, a segment that can be crucial for them, especially during the current trough in aviation.

Carriers such as IndiGo, run by InterGlobe Aviation Pvt. Ltd, SpiceJet Ltd and JetLite (India) Ltd, the low-fare subsidiary of Jet Airways, have started offering free food on board for corporate fliers, and waiving cancellation and rescheduling charges.

Kingfisher Airlines is also planning special deals with companies that have employees frequently flying on its no-frills airline Kingfisher Red, previously Air Deccan.

“Domestic airlines are doing this to make corporate travellers feel special,” said Mark D. Martin, senior adviser (advisory services) at audit and consultancy firm KPMG India Pvt. Ltd. “Corporate travellers account for up to 70% of the total flying population during peak season. During the lean season, especially holidays, the percentage of corporate travellers usually declines to 50%.”

Such changes, however, could be damaging, because it could put off other passengers. Companies should instead prefer volume ticket deals that would lower travel costs, on-time performance assurance, express check-in and telephone check-in facilities, and most importantly, deals with budget hotels, Martin added.

Bruce Ashby, chief executive officer of IndiGo, said his airline offers companies all-inclusive fares and discounts based on the commitment of volumes.

“Convenient reporting and travel tracking features for bookings (are) made under the corporate programme so that travel can be easily monitored at the corporate level, rather than requiring individuals to submit expense forms for each trip,” he said.

Following the popularity of prepaid meals for business fliers, IndiGo now plans to allow other customers to prepay for meals at the time of booking itself. “As such, corporate travellers who fly Kingfisher Red can benefit from the special pricing packages that are offered to corporate clients,” said Hitesh Patel, executive vice-president at Kingfisher Airlines. But the airline is not considering waiving rescheduling or cancellation charges for now, he said.

Kingfisher Airlines has already extended benefits of its frequent flyer programme to those flying Kingfisher Red, which mostly sees business passengers from small and medium-size companies. “Our estimate is that close to 50% of the travellers flying on Kingfisher Red class belong to this segment,” Patel said.

SpiceJet says on its website that its corporate fares are pre-loaded with zero charges for any rescheduling and cancellation along with a complimentary snack on board.

Now plan bus journeys with iXiGO.com?

New Delhi, September 11, 2008 – iXiGO (www.ixigo.com), India’s fastest growing online travel search engine today announced the launch of its bus search tool, enabling search, comparison and booking of bus tickets from multiple bus operators and bus booking sites in India.

iXiGO’s bus search tool available at www.ixigo.com/buses aggregates hundreds of private bus operators spread over 500 towns and across 2300 routes. iXiGO compares bus travel options ranging from non-AC buses to luxury sleeper buses and air-conditioned Volvos, allowing travelers to search using various parameters such as timings, amenities and price. Once the user selects the best deal on iXiGO, he or she is redirected to the checkout page of the bus booking sites, where the transaction is completed.

iXiGO has partnered with Ticketvala, redBus and TicketGoose, India’s leading online bus booking sites, to enable the online bus ticketing. Speaking on the partnership, Phanindra Sama, CEO of redBus said, “We are delighted to be associated with India’s leading travel search engine. Their meta-search technology adds value to our bus ticketing capabilities.” Haranath Lokanadham, CEO of Ticketvala added, “We have immense faith on iXiGO’s top-rated product and team. Together, we can offer more value to travelers searching for buses as a part of their journey in India”.

Announcing the launch of the service, Aloke Bajpai, Founder & CEO of iXiGO said, “There is huge potential in online bus booking and we will work with our partners to search a wider base of bus operators and offer Indian consumers a more comprehensive and usable bus ticket search engine over time.”

iXiGO’s pioneering approach to online travel aggregates information from multiple travel websites enabling travelers to save time and money by searching more efficiently and comprehensively. For its partners, iXiGO’s business model generates qualified leads from focused travelers. Earlier, iXiGO has launched India’s biggest hotel booking search, featuring 6000+ hotels from over 400 cities in the country, and India’s most comprehensive direct-booking domestic airfare search. The website has posted a month-on-month growth of 20% in search traffic and has recently received seed financing from BAF Spectrum, Singapore.

ABOUT iXiGO.com:

iXiGO.com ® is India’s leading online travel search engine based out of Gurgaon. Launched in June 2007 by an entrepreneurial team of young IITians and INSEAD MBAs, iXiGO.com has been recognized as a NASSCOM Top-100 Innovator and BusinessToday and WSJ-Mint have named it among India’s hottest startups for its unique market approach, product usability, and passionate management team. For more information about iXiGO, visit www.ixigo.com.

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