India\'s Kingfisher Airlines To Fly To KL

NEW DELHI, Jan 16 (Bernama) -- Kingfisher Airlines, India\'s second largest private airlines, will soon start daily flights from Chennai to Kuala Lumpur.



India\'s Civil Aviation Ministry is said to have granted permission for the airline to fly the Kuala Lumpur, Bangkok and Singapore sector.



The Economic Times reported today that the Kingfisher, owned by the United Breweries Group, controlled by Indian industrialist, Vijay Mallya, would fly the new routes.



We have granted permission to Kingfisher to operate daily services on three more international sectors, including Chennai-Kuala Lumpur, with immediate effect, a ministry official was quoted as saying.



The paper however did not name the official.



The Aviation Ministry has asked the airlines to conduct proper study of air tr+affic on new routes before announcing the launch.



In case the airline launches its services on new routes without a market survey, it may be forced to withdraw flights later. This must be avoided, said the official.



After Jet Airways, Kingfisher is one of the most preferred airlines in the domestic circuit. As of last year its share of Indian aviation market stood at 27 percent.



According to recent ministry data, the Bangalore-based airline, along with its budget carrier, Kingfisher Red, flew 11.26 million passengers last year, only next to Jet Airways that carried 12.01 million passengers.



-- BERNAMA

Airlines cut business class fares

Faced with a 10 to 15 per cent fall in passenger traffic, business class travel is coming down to earth. For the first time, Jet Airways and Paramount are introducing apex (advance purchase) fares and Kingfisher and state-owned Air India are offering free travel for spouses to boost bookings for this premium service.

But even all-business carrier Paramount Airways has announced apex fares and a scheme under which passengers can get a complimentary ticket for a companion for Rs 750 in January.

Much of the hit is a result of corporate cost cutting, with senior executives now increasingly travelling economy class on domestic routes. Business class tickets are about three times an economy class ticket.

�Since the financial meltdown in the US and Europe, we have seen companies in India tightening their belts. From September onwards, we have seen a fall in premium travel within India,� said Raj Sivakumar, vice president, revenue management, Jet Airways, India\'s largest private airline.

In response, the airline launched an apex offer January 5, applicable to 60 flights, that are 30 to 35 per cent lower than normal business class fares.

The three-day apex fares range from Rs 7,900 to Rs 8,100 (one-way), the five-day apex fares range from Rs 6,500 to Rs 11,500 and the seven-day apex fares from Rs 4,500 to Rs 17,500 depending on the sector.

�We are looking to not just pump up the loads, but also to get less price-sensitive economy passengers to fly business,� says Sivakumar. He claims the airline has seen a five to 10 percentage point increase in premium traffic since the scheme began.

�We\'ve managed to increase our market share from 26 to 28 in South India in 2008. After the slowdown, companies were finding our product even more attractive as ours is a business class product with high-end economy fares,� said M Thiagarajan, managing director, Paramount Airways.

Air India was among the first off the block, announcing a spouse-plus offer December 31 for executive class passengers on the domestic routes.

The scheme, on offer between January and February, allows business class passengers to take spouses along by paying only the passenger service fee (paid to the airport authority) and airport user development charges on select routes.

The airline has sweetened the deal with a free-stay for the spouse at select Taj properties. The Indian flag carrier is also looking to aggressively market its coupon schemes for corporate travelers that offers corporate houses a 15 per cent discount.

Meanwhile, Kingfisher Airlines, which has seen its passenger load factor in business class at 35 per cent to 40 per cent in the last few months, is planning a free-companion offer on domestic routes. It has also introduced a 12-coupon offer on its domestic business class that comes tied with the possibility of winning a business class ticket to London and back through a draw of lots.

Business class typically accounts for 50 to 60 per cent of an airline\'s revenue. �The drop in business class passengers is bound to get the airlines worried as it\'s the business class tickets that give them the power to price lower in economy,� said Kapil Kaul, CEO-India subcontinent & Middle East, Centre for Asia Pacific Aviation (CAPA).

The move to cut fares in business class takes place even as airlines have cut economy fares. �We have seen about 25 per cent of the business class traffic shift to economy over the last six months,� said Anoop Kanuga, chairman-western region, Travel Agents Association of India.

Airline losses will be manageable in \'09: Report

NEW DELHI: There\'s a silver lining behind every dark cloud. This holds true for the aviation sector too as the turbulence which hit it in 2008 is likely to clear up a little this year. But that\'s likely only in the third quarter of this year, says Policy Outlook 2009, a report by the Centre for Asia Pacific Aviation (CAPA). The demand for the first half of 2009-10 will be weak, but improve later. Though there will be airline losses this year too, the magnitude will be manageable. Over the last three to four years, the industry has lost over $3 billion.

"CAPA, in fact, had projected in 2005 that the period until 2010 would be largely profitless, and the true potential of the sector would only emerge after that,\'\' says Kapil Kaul, CEO Indian Subcontinent & Middle East. "So 2009 will dictate who emerges a winner.\'\'

If oil prices stay below $50, airline losses will be significantly reduced, he says. "In fact, air traffic for 2009-10 could return to 2007-08 levels.\'\'

But Sushi Shyamal, associate director, Ernst & Young, says that hoping for low crude prices may not be the best bet for Indian aviation. "Though it\'s highly unlikely that crude will reach the high levels that were ruling sometime back, in the foreseeable future, they are expected to stabilize at price levels higher than the current prices. The key to profitability for airlines would hinge on streamlining operations and optimizing routes.\'\' Plus, if additional sops are given to this sector in terms of FDI relaxations, fiscal bailout and a lower interest rate regime, it could help the sector to recover.

"International traffic, especially to West and South Asia, remains strong. Premium traffic, however, has been declining and may seriously impact Indian carriers such as Jet Airways, Kingfisher and Air India.\'\' Traffic to Europe and North America is likely to remain weak due to the economic slowdown there and excess capacity on UK/Europe routes. Inbound traffic too has been hit due to the Mumbai\'s terror attacks. But all is not doom and gloom, it predicts. Much depends on the economy, fuel prices and political/security stability.

The report says as per the long standing proposal, if the foreign airlines are permitted to invest up to 25% in domestic airlines, it would give them a lifeline. This would see direct investment of $750 million to $1 billion based on an industry valuation of $3-4 billion (excluding AI). "However, most prospective airline investors would probably seek at least 26% to secure a seat on the board,\'\' it says. Low-cost carriers (LCC) such as AirAsia, Ryanair, easyJet, Jetstar and Air Arabia may also evaluate opportunities in India once regulations permit.

It\'s also likely that the regulation that domestic airlines must operate for at least five years and operate a minimum fleet size of 20 aircraft before being allowed to go international, may be relaxed to three years. This would help LCCs like SpiceJet and IndiGo.

Restrictions on new airline entry may continue in 2009, but licences may be issued for those planning to start operations in 2010. "This would be due to concerns regarding overcapacity in the sector,\'\' says Shyamal.

The report further says that there will be pressure on full service carriers to reduce losses this year. Jet, AI and Kingfisher may need cash cover till 2010. Though the government has infused fresh blood into airlines last year, what with the reduction of oil prices, the overall fiscal environment is uncertain.

LCCs continue to be vulnerable. "The new management in SpiceJet is still to take hold of the situation and the present cash position may last a few months more. Indigo\'s losses may not be very different either, but it continues to deliver a robust operational performance,\'\' says the report.

Will we once again fly high? It waits to be seen.

Zero visibility hits Kolkata\'s air traffic

Zero visibility due to dense fog on Thursday affected air traffic at the Netaji Subhas Chandra Bose International Airport in Kolkata, airport sources said.
Visibility which was around 0.55 metre at 11 pm on Wednesday night dropped to zero around midnight and hovered around zero metre till 8 am on Thursday, the sources said.
Altogether 47 domestic flights could not take off while 13 flights could not land, the sources said.

Eleven international flights were also delayed. Of them, six could not take off.Of the five arrivals, three were diverted, the sources added.Three international flights which arrived after midnight were re-routed, airport sources said.

Lufthansa\'s Frankfurt-Kolkata flight could not land and was diverted to Hyderabad. Similarly, Air India Express\' Singapore-Kolkata flight was diverted to Hyderabad while Air India\'s Jeddah-Kolkata flight was re-routed to Nagpur.

However, two other international flights which arrived before 11.30 pm could land taking advantage of the CAT II Instrumental Landing System at the airport, sources said.

Three domestic flights, too, were diverted on Wednesday night.Indigo\'s Mumbai-Kolkata flight was sent back to Mumbai. Kingfisher Airlines\' Chennai-Kolkata flight was diverted to Hyderabad. Sahara Airlines\' Bengaluru-Kolkata flight returned to Bengaluru as it could not land in Kolkata, the sources said.

No flights operated on early Thursday morning and the situation was expected to improve only later in the day, the sources added.

Aviation sector registers 5 percent decline in air traffic

The global financial crisis has adversely impacted the Indian aviation sector and it has posted 5 per cent decrease in domestic air traffic for the calendar year 2008. About

411 lakh people used air services in 2008 as compared to 433 lakh in 2007. Number of air travelers posted negative growth rate first time in last six years.

High air fares and low customer spending affected the airline industry during the period. Almost all leading air lines posted negative passenger growth rate except low cost carriers IndiGo and SpiceJet and south-based Paramount.

International crude rates surged to its peak level in the period between April to September leading to increase in Jet fuel prices. Air lines hiked air fares causing decline in number of air travelers.

Government has expressed concerns over declining growth of Indian aviation sector. Union Aviation Minister, Praful Patel said, "The slowdown in aviation is having a trickle down impact on everything. Lesser number of people flying means poor finances for airlines and also affects airport development projects among other things."

Government may increase Foreign Direct Investment limit in the aviation sector to help the ailing industry.

Jet Airways announces intentions to lease out planes

Jet Airways is eyeing a possible leasing of its surplus aircraft to other carriers, after recent route rationalisation which has seen numerous planes grounded.

Plans to launch a service to Saudi Arabia and a second service to Dubai have been postponed due to the current global economic climate, and another service to Shanghai has been dropped from the network.

Confirming the talks Saroj K. Datta, Jet Airways Executive Director, named Oman Air, Turkish Airlines and Gulf Air as two carriers which Jet has hosted meetings with.

“We have some surplus aircraft and wanted to know whether Oman Air would be interested in leasing them,” said Mr Datta.

“We already have leased two A330s to Gulf and three A777s to Turkish Airlines.”

“But [a lease] is subject to government approval, so I can’t talk more on this at this stage. Apart from that, the board of directors of both companies also need to approve this,” he adds.

Jet Airways also notes that because they are cutting capacity, it’s logical that staff operations will also need to be cut.

Jet Airways currently operates with a fleet of 85 planes to over 60 destinations.

Jet Airways group remains India\'s largest airline

New Delhi (IANS): Private carrier Jet Airways, together with its low-cost airline JetLite, was India\'s largest domestic air services operator in 2008, ferrying some 12.01 million passengers for a market share of 29.5 percent, latest data showed on Tuesday.

Vijay Mallya\'s Kingfisher Airlines, along with its budget carrier Kingfisher Red, was next, flying 11.26 million passengers to capture a 27.6 percent market share, as per data released by the civil aviation ministry.

The state-run Air India\'s domestic operations, which earlier operated under the Indian Airlines brand name, continued to lose market share and flew just 6.63 million passengers for a market share of 16.3 percent. It had a 19-percent market share in 2007.

�We have been the market leader since 2000 and we continue to maintain that lead. The acquisition of Air Sahara, which now flies under the JetLite brand name, our market share has only improved,� said a spokesperson for Jet.

Air India, which was formed after the merger of another state-run carrier Indian Airlines - that now ceases as a brand name - said they hope to regain a lot of their market share in the current year.

�Last year, we were third. Now we rank second after Jet Airways and ahead of Kingfisher, that is, if you consider the airlines individually,� said an Air India spokesperson.

�As new aircraft join our fleet at regular intervals, you will see our market share improve further.�

Interestingly, despite the proliferation of low-cost carriers like SpiceJet, GoAir and IndiGo, the scheduled carriers continued to dominate the market with a 54.7 percent share.

Overall, Indian domestic carriers ferried 40.7 million passengers in 2008, a marginal drop of 5 percent over the previous year. Indian carriers carried 42.8 million passengers in 2007.

Low-cost carriers show maturity in new year

Mumbai: The year\'s begun on a positive note for the airline business. Lower jet fuel prices have helped bring back occupancy, while making the airlines more aware of preset market dynamics and the negative effects of aggressive competition.

Amongst this, an interesting trend that got me thinking was the evolution of Indian low cost carriers (Indigo, Spicejet,Jetlite,Go Air), who have gone ahead to provide what the customer wants, as opposed to what he can pay for.

They have also started using products and services as market differentiators, as against the earlier practice of using price points.

LCCs are no longer toeing the line of positioning themselves at mere price point of Rs 2,999 or Re 1 per ticket. Instead, to drive loyalty, they have raised the tempo for building awareness on flight connections, schedules and in-flight services.

Recent shifts in the corporate strategies of LCCs include the introduction of business class to attract corporate travellers, the positioning of flight services and network as choice points, innovative radio and television advertising campaigns that focus on in-flight services, a wide selection of reading material and hot meals on board.

Interestingly, they are also offering flyers the chance to earn frequent flier miles, something uncommon in the LCC business. This is a stark difference to how LCCs started off in 2005. I personally am pleasantly surprised that they no longer contest rail ticket prices nor adopt aggressive pricing strategies.

They have also stopped talking trash in the market (remember the hoardings that came out in Mumbai of "We\'re Changed" and "We Made them Change"?) and haven\'t deployed frivolous capacity.

Airlines in India have finally realised that what might have worked well in the West does not necessarily work here. While travellers there might be more practical, back home, anyone who sets foot in an aircraft demands to be pampered, and rightly so.Pricing strategies too have adopted market dynamics and what consumers want as service.

Today, instead of negotiating for an overpriced snack on-board, the cost of a light meal is \'secretly\' billed in your ticket price. So, while you\'re impressed on getting a free meal, the airline is actually making additional revenue by billing everyone on board, instead of only those who would have opted for it.

Additionally, keeping the base fare flexible and maintaining a constant fixed revenue element is also working right for airlines. The Rs 3,200-3,800 in the ticket charged as the \'fuel surcharge\' might put off customers, especially when fuel prices have plummeted over 60%. However, in a market where oil pricing is dynamic and revisions are expected twice a month, the element of fuel surcharge works more as a minimum revenue assurance per seat. This creates elasticity in ticket pricing.

In the year ahead, airlines will mature and realise that whether they are an LCC or a full-service carrier, the Indian passenger wants to be pampered. It does not require complicated strategies to run an airline, all it takes is common sense and an uncanny intuition to understand what sells, as opposed of what you can offer.So, welcome aboard, your coffee and favourite newspaper awaits!

Indian Government Likely To Allow 25% FDI In Domestic Airlines

Civil Aviation Minister Praful Patel hinted that the Government was considering foreign direct investment or FDI of up to 25% Indian carriers by overseas airlines, reports media.



In other words, the foreign airliner will have no right to block special resolutions in the board, for which an investor needs a 26% voting right.



Airlines, including Kingfisher, have been requesting the Government allowing foreign carriers to take stakes in domestic carriers. For information, the Indian airline industry is estimated to lose close to Rs.10,000 crore this fiscal, reports said.

The report further stated that foreign carriers such as British Airways, Lufthansa, Emirates, Singapore Airlines and Virgin Atlantic are understood to have shown interest in Indian carriers in the recent past.



Kapil Kaul, Chief Executive Officer (Indian sub-continent) of global aviation consultancy firm, Centre for Asia Pacific Aviation, reportedly said the ability for foreign airlines to invest might provide a much-needed lifeline for an industry that desperately needs cash.