blue skies ahead?
Friday, March 04, 2005
InterGlobe grounds budget airline
At a time when companies are falling over each other to set up an airline in the country, InterGlobe Enterprises, one of the first corporates to get clearance from the government to start an airline, has put its plans on hold.
“We have decided not to go ahead with the plan to start the airline for now,” Rahul Bhatia, managing director, InterGlobe Enterprises, said here today.
The government gave an in-principle clearance to InterGlobe Enterprises in April 2004 to start operations — way ahead of many companies that are planning to enter the airline business in the country at present.
According to Bhatia, the company has decided to put its plans on hold as it thinks that there is excess capacity generated in the market as a result of the launch of a number of airlines.
“The excess capacity is the reason. When we decided to start the business there were not many players. But the situation is not the same now,” he pointed out.
When asked if the company had completely shelved its plans to start the airline, he said, “It is shelved for now. We are not sure whether we will take a re-look at it or not.”
The domestic aviation sector is on an upswing with the aviation sector projected to grow at over 25 per cent for the next few years. The domestic passenger traffic, in December 2004 touched 3.95 million from 3.10 million in December 2003, registering an increase of 27.2 per cent.
In the last few months India has seen a sudden upsurge in the number of airlines planing to start services. Various prediction by airline industry point out that about 13 airlines would start operations over the next 12 to 18 months. And most of them will follow a low-cost no-frill model.
The airlines that are expected to start services are Air One, Indus Air, Royal Air, East West, Wadia, Kingfisher, Visa, Yamuna, Air India Express and the low cost service by Alliance Air. Airlines like Royal Air and Kingfisher are currently in the process of acquiring aircraft and are expected to start operations soon.
It is also worth noting that some of the existing players have been pressing the government to raise the entry barrier in the airline sector so that non serious players do not make an entry into the sector.
As per the present norms, an airlines required five aircraft and a minimum paid up equity of Rs 30 crore to get a license to operate.
Airlines like Jet Airways and Air Sahara has been petitioning the government for raising the entry level barriers by raising the minimum paid up equity to Rs 250 crore.
- posted by katongking @ 1:42 pm 0 comments
At a time when companies are falling over each other to set up an airline in the country, InterGlobe Enterprises, one of the first corporates to get clearance from the government to start an airline, has put its plans on hold.
“We have decided not to go ahead with the plan to start the airline for now,” Rahul Bhatia, managing director, InterGlobe Enterprises, said here today.
The government gave an in-principle clearance to InterGlobe Enterprises in April 2004 to start operations — way ahead of many companies that are planning to enter the airline business in the country at present.
According to Bhatia, the company has decided to put its plans on hold as it thinks that there is excess capacity generated in the market as a result of the launch of a number of airlines.
“The excess capacity is the reason. When we decided to start the business there were not many players. But the situation is not the same now,” he pointed out.
When asked if the company had completely shelved its plans to start the airline, he said, “It is shelved for now. We are not sure whether we will take a re-look at it or not.”
The domestic aviation sector is on an upswing with the aviation sector projected to grow at over 25 per cent for the next few years. The domestic passenger traffic, in December 2004 touched 3.95 million from 3.10 million in December 2003, registering an increase of 27.2 per cent.
In the last few months India has seen a sudden upsurge in the number of airlines planing to start services. Various prediction by airline industry point out that about 13 airlines would start operations over the next 12 to 18 months. And most of them will follow a low-cost no-frill model.
The airlines that are expected to start services are Air One, Indus Air, Royal Air, East West, Wadia, Kingfisher, Visa, Yamuna, Air India Express and the low cost service by Alliance Air. Airlines like Royal Air and Kingfisher are currently in the process of acquiring aircraft and are expected to start operations soon.
It is also worth noting that some of the existing players have been pressing the government to raise the entry barrier in the airline sector so that non serious players do not make an entry into the sector.
As per the present norms, an airlines required five aircraft and a minimum paid up equity of Rs 30 crore to get a license to operate.
Airlines like Jet Airways and Air Sahara has been petitioning the government for raising the entry level barriers by raising the minimum paid up equity to Rs 250 crore.
- posted by katongking @ 1:42 pm 0 comments
SpiceJet to fly to India's smaller cities
India's Royal Airways Ltd, which will start its low-fare SpiceJet carrier in May after being grounded for more than eight years, will seek to tap people wanting to fly in the country's smaller cities.
'There is an opportunity to stimulate new travel because of under capacity' in services to small cities, Jason Bitter, chief operating officer, said in an interview with Bloomberg Television. 'There are lots of opportunities for routes in India that are really underserved.'
SpiceJet will seek to sidestep competition from new and existing airlines that fly mostly to the biggest cities of Mumbai, New Delhi, Bangalore, Chennai and Kolkata.
The country's carriers are targeting the growing number of travellers wanting to fly in India, where economic expansion is putting more money in the hands of people. They have cut fares by more than half in the past two years to win rail passengers.
The fastest economic growth in the country in the past 15 years last year is prompting the start of new airlines and the revival of old carriers.
Deccan Aviation Pvt's Air Deccan, India's only low-cost carrier, began flights in September 2003. Beermaker UB Group's planned Kingfisher Airlines starts in May, while discount carrier Go Air will begin operating in September. East West Travel & Trade Links Ltd also aims to restart flights after seven years.
SpiceJet expects to get two of its three leased Boeing Co 737-800 planes, which can seat 189 people in all-economy configuration, in April.
The airline is seeking to tap cities with a population of three million to five million people, Mr Bitter said. Large cities such as Mumbai and New Delhi have populations in excess of 10 million in the world's second-most populous nation, which has more than a billion people.
India's domestic air traffic rose 12 per cent in the year ended March 31, 2003, to a record 14.8 million passengers, according to the government.
The New Delhi-based Centre for Asia-Pacific Aviation estimates India's air traffic will rise by five million passengers annually for the next 10 years and the aviation ministry expects domestic traffic to grow 20 per cent each year for the next five years.
- posted by katongking @ 1:33 pm 0 comments
India's Royal Airways Ltd, which will start its low-fare SpiceJet carrier in May after being grounded for more than eight years, will seek to tap people wanting to fly in the country's smaller cities.
'There is an opportunity to stimulate new travel because of under capacity' in services to small cities, Jason Bitter, chief operating officer, said in an interview with Bloomberg Television. 'There are lots of opportunities for routes in India that are really underserved.'
SpiceJet will seek to sidestep competition from new and existing airlines that fly mostly to the biggest cities of Mumbai, New Delhi, Bangalore, Chennai and Kolkata.
The country's carriers are targeting the growing number of travellers wanting to fly in India, where economic expansion is putting more money in the hands of people. They have cut fares by more than half in the past two years to win rail passengers.
The fastest economic growth in the country in the past 15 years last year is prompting the start of new airlines and the revival of old carriers.
Deccan Aviation Pvt's Air Deccan, India's only low-cost carrier, began flights in September 2003. Beermaker UB Group's planned Kingfisher Airlines starts in May, while discount carrier Go Air will begin operating in September. East West Travel & Trade Links Ltd also aims to restart flights after seven years.
SpiceJet expects to get two of its three leased Boeing Co 737-800 planes, which can seat 189 people in all-economy configuration, in April.
The airline is seeking to tap cities with a population of three million to five million people, Mr Bitter said. Large cities such as Mumbai and New Delhi have populations in excess of 10 million in the world's second-most populous nation, which has more than a billion people.
India's domestic air traffic rose 12 per cent in the year ended March 31, 2003, to a record 14.8 million passengers, according to the government.
The New Delhi-based Centre for Asia-Pacific Aviation estimates India's air traffic will rise by five million passengers annually for the next 10 years and the aviation ministry expects domestic traffic to grow 20 per cent each year for the next five years.
- posted by katongking @ 1:33 pm 0 comments
Thursday, March 03, 2005
Passengers stranded as Air Deccan puts flights on hold
No-frills carrier Air Deccan, on Wednesday, announced the sudden withdrawal of services to the city till March 9. Nearly 120 passengers booked on Thursday's flight are now left in the lurch. This is the second instance of Air Deccan suspending operations for a prolonged period at short notice since starting flights to Kolkata a couple of months ago.
Though Air Deccan offered no explanation, sources said the Chennai-Kolkata-Chennai sector had been summarily dumped after one of the A-320 aircraft in its fleet was grounded.
The "now on, now off" operations on the Kolkata-Chennai sector has left passengers as well as the travel/trade industry miffed. While they acknowledge that technical glitches can occur, what they don't agree to is the absence of an exigency plan.
"The carrier must augment its fleet and start operations in the sector when there's a degree of confidence to service it properly. Sudden suspension of operations erodes passenger confidence," a travel agent said.
Aviation industry experts, however, pointed out that such risks were part of the low-cost airline business. "Unlike regular carriers, they cannot afford to keep a buffer aircraft. That would jack up costs," an aviation industry source said.
More here.
- posted by katongking @ 11:45 am 0 comments
No-frills carrier Air Deccan, on Wednesday, announced the sudden withdrawal of services to the city till March 9. Nearly 120 passengers booked on Thursday's flight are now left in the lurch. This is the second instance of Air Deccan suspending operations for a prolonged period at short notice since starting flights to Kolkata a couple of months ago.
Though Air Deccan offered no explanation, sources said the Chennai-Kolkata-Chennai sector had been summarily dumped after one of the A-320 aircraft in its fleet was grounded.
The "now on, now off" operations on the Kolkata-Chennai sector has left passengers as well as the travel/trade industry miffed. While they acknowledge that technical glitches can occur, what they don't agree to is the absence of an exigency plan.
"The carrier must augment its fleet and start operations in the sector when there's a degree of confidence to service it properly. Sudden suspension of operations erodes passenger confidence," a travel agent said.
Aviation industry experts, however, pointed out that such risks were part of the low-cost airline business. "Unlike regular carriers, they cannot afford to keep a buffer aircraft. That would jack up costs," an aviation industry source said.
More here.
- posted by katongking @ 11:45 am 0 comments
Aircraft Shortage
The airline industry in India is witnessing a sudden shortage of new generation aircraft for leasing, resulting in a spurt in leasing rates.
According to Kapil Kaul, Chief Executive Officer (India and West Asia) of the Centre for Asia-Pacific Aviation (CAPA), the sudden shortage of new generation aircraft for leasing, especially the 737-800s and A320s is a worrying factor for the industry. "Lease charges have been going up by 15 per cent to 20 per cent," Kaul said.
He said the lease charges of a 737-700s and 800s and range between $275,000 and $300,000 per month. According to CAPA, India will have around 400 commercial planes by 2010 compared with 175 currently. Within the next two years, the country will have 100 more planes. This year alone we will see airlines placing orders worth $10 billion from Airbus and Boeing. This is nearly one-third of the total number of aircraft sales worldwide.
More here.
- posted by katongking @ 11:31 am 0 comments
The airline industry in India is witnessing a sudden shortage of new generation aircraft for leasing, resulting in a spurt in leasing rates.
According to Kapil Kaul, Chief Executive Officer (India and West Asia) of the Centre for Asia-Pacific Aviation (CAPA), the sudden shortage of new generation aircraft for leasing, especially the 737-800s and A320s is a worrying factor for the industry. "Lease charges have been going up by 15 per cent to 20 per cent," Kaul said.
He said the lease charges of a 737-700s and 800s and range between $275,000 and $300,000 per month. According to CAPA, India will have around 400 commercial planes by 2010 compared with 175 currently. Within the next two years, the country will have 100 more planes. This year alone we will see airlines placing orders worth $10 billion from Airbus and Boeing. This is nearly one-third of the total number of aircraft sales worldwide.
More here.
- posted by katongking @ 11:31 am 0 comments
IA may withdraw discount plan, Sahara in fare war
The huge rush of passengers buying its 16-tickets-for-Rs-65,000 is forcing Indian Airlines to contemplate withdrawing the scheme a fortnight after its launch. The scheme was introduced for economy-class passengers on February 16, and the overwhelming response forced the airline to extend the scheme to business class.
- posted by katongking @ 11:31 am 0 comments
The huge rush of passengers buying its 16-tickets-for-Rs-65,000 is forcing Indian Airlines to contemplate withdrawing the scheme a fortnight after its launch. The scheme was introduced for economy-class passengers on February 16, and the overwhelming response forced the airline to extend the scheme to business class.
[Huh??? Forced? Tell it like it is - if you seized the moment to sell your business class inventory to lock in your revenues, say so...]Passengers buying the [Air Sahara] Sixer scheme (that offers six domestic air tickets for Rs 36,000) now have the option of buying four family one-way tickets for Rs 10,000 or six family tickets for Rs 15,000. "Most schemes on offer today are targeted at passengers themselves. We are trying to expand the scope of the scheme by including family members," Air Sahara CEO Rono Dutta said.
- posted by katongking @ 11:31 am 0 comments
