The air transport cartel is at it, again. In all too familiar theme, we passengers must get ready to pay one more "fee".

Readers will recall that airlines decided to scrap travel agent commissions, in India, effective October 31, 2008. This move by the airlines, created an uproar in the industry and led to strikes and protests. Presently, airlines pay 5% of the base fare as sales commission on tickets issued by travel agents, without any charge to passengers.

According to the Deccan Chronicle, airlines and travel agents have mutually decided to add a new component, to be called a "transaction fee", which would be a minimum of Rs 350 for domestic and maximum of Rs 10,000 for international tickets, which will replace the existing commission.

The transaction fee will be euphemistically reflected as “other charges” on the ticket. This is over and above, other fees and surcharges like fuel surcharge, air traffic congestion surcharge, user development fee, and passenger service fee, already charged to passengers.

God forbid, the airlines defile the holy altar of "low air fares" and incorporate all these charges, which make up almost 75% of the total cost of the ticket, in to their fares.

Reportedly, the transaction fee will be at least Rs 350 on domestic air tickets for the economy class, and Rs 500 for business class.

The fee on international air tickets will be Rs 1,200-2,400 (economy), Rs 2,000-5,000 (business) and Rs 5,000-10,000 (for first class tickets). These charges will be uniform across airlines, including low-cost carriers such as SpiceJet, Indigo, Kingfisher Red, etc.

At a time when everyone is cutting back on expenses, with this new arrangement, travel agents will earn double of what they are getting right now, all for no additional effort, and all of it, on us, passengers' backs.

If you think you can avoid this mutual back-scratching "fleece the passenger party", and book directly from the airlines' websites or offices, think again. Air tickets booked through airline websites or their offices will also attract the transaction fee, and conveniently, this fee will be earned by the airline. Oh what joy. The competition which allows me to differentiate between good and bad travel agents, and enables me to demand value for money service, is simply overwhelming.

I wonder why is Mr. Patel asking for tax relief on aviation fuel ? By asking their passengers to needlessly pay even more, the air transport industry in India, seems to have already overcome this perfect storm of slowing demand coupled with rising costs.

See related story "Travel agents need to earn their income"

Anirban Chowdhury of The Business Standard reports that just four days after it was opened, the third runway at the Delhi airport was closed today after some crucial equipment stopped functioning. Operations were already restricted to daytime use after the runway lights failed over the weekend, rendering the runway unusable at night.

According to Air Traffic Controller sources at the Delhi airport, the decision to close the runway was taken after the instrument landing system (ILS), which guides aircraft to land when visibility is poor, stopped functioning in the morning.

As a result, the runway could not be used before 10:30 am and had to be shut down after 1:00 pm. (The ILS was not required during the period in-between). That left the runway with just 2.5 non-peal hours of operations with hardly any landings.

Several pilots told Business Standard that this could become a serious problem in the winter, which will descend on Delhi in a couple of months. "The faulty ILS could be a huge menace in the winters and will severely affect flights during low-visibility conditions because of the fog," said a Jet Airways pilot.

Delhi accounts for almost a third of the total air traffic in the country. The airport was handed over to GMR-controlled Delhi International Airport Ltd (DIAL) in May 2006 for expansion and a facelift. The new runway was built to make its airport handle up to 60 flights in an hour, up from the existing 35-40, to reduce air congestion plaguing Delhi and Mumbai airports, help carriers save expensive jet fuel, and reduce waiting times for passengers.

The current problems could ground all these plans. A DIAL executive confirmed that the runway was practically closed today and only the primary and the secondary runways were used for flight operations.

However, a DIAL spokesperson defended the decision to close the runway: "As a part of the phased opening of the third runway, DIAL, the Air Traffic Controller and the Director General of Civil Aviation have agreed to ensure that any observation from users can be dealt with for further improvement and any minor work can be carried out as a new runway is also subject to daily inspections and maintenance."

The runway’s ILS, he added, was configured for low-visibility conditions, which was not required under present conditions. As it consumes a lot of energy, work was going on to reconfigure it to current visibility.

Airline pilots, on their part, said that more than 40 per cent of the new runway, which is currently only used for landing, is unusable because of an adjacent tall statue that comes in its path. For landing purposes, the runway thus becomes even shorter in length than the primary runway.

"The aircraft gets a shorter length only when it comes from the side of the statue. However, even that length is good enough for larger aircraft like the A380,” said the DIAL spokesperson.

Two newspaper articles, published in Bangalore today, concerning BIAL, the company promoting Bengaluru International Airport, deeply saddened me, despite proving my claims right.

Readers will recall, for the past year, in public and on this blog, I have been claiming that the growth rate of aviation in Bangalore, was beyond the capacity of the new BIAL airport. My article "The case for keeping HAL airport open" highlights this.

The first article in The Times of India, quotes Mr. Albert Brunner, CEO of BIAL, “We started the process of planning for the Bangalore airport about two years before Hyderabad did. So we couldn’t anticipate the huge growth Bangalore was to see subsequently”

Thank you for making my point sir, after denying it for almost one year. But I would love to hear your corporation's response to the contents of the Deccan Chronicle article, also published today, which claims "According to a highly placed official, who was part of key board meetings of BIA during 2005 and 2007, none of the (private) partners were ready to fork out the Rs 200 crore that was needed to make the airport better, if not the best in the country."

The article clear contradicts BIAL's claim in the Times of India, about the high growth rate being unanticipated. The article quotes source who claim that ALL the partners in BIAL, governments included, were fully aware of the massive growth rate in Bangalore's aviation in mid 2006, while the terminal was still in blue-print stage, but the promoters refused to pump in a measly Rs. 200 Cr. additional, to ensure the required corrective action.

The article goes on to say “When the work on BIA had commenced, there was a report that called for immediate attention —colossal air traffic growth. The study was commissioned by BIAL. Lufthansa Consulting carried it out. The verdict was that between 2005 June and 2006 July, air traffic grew by 45 percent, the largest in the history of any city in the country. The revised traffic study showed Bengaluru's explosive air traffic growth and pegged it at 10.1 million passengers by 2010, which it has already crossed now,” sources said.

A special board meeting was called to discuss the report in mid 2006. “The stakeholders led by Mr Albert Brunner, were called to attend that meeting. During the meeting, all the four members of management belonging to Siemens, Unique (Flughafen Zürich AG) — Zurich Airport, Switzerland, Larsen & Toubro, and officials of the Airport Authority of India and KSIIDC were apprised of the situation. “The time was ripe to affect any changes in the structural and design plans as the blueprint was still on the drawing board and no work had taken place,” sources said adding that it was arrived at that an additional Rs 200 crore had to be invested to meet the growing demand.

Already drained in terms of the two years taken in signing the concession agreement, the private investors were in no mood to listen. “They outright rejected the proposal stating that a lot of time and money was already wasted and that they wouldn’t give in to the new demand, despite the state argued that it has provided land free of cost and centre stated that it was pumping in 13 percent of total cost.

But the private partners while refusing to pump in additional funds said that they could make good with a functional airport and at the same increase the airport’s capacity. So a compromise was made on the aesthetics and futuristic architecture to save money,” the official said. So what Bengaluru eventually ended up with is a 71,000 sqft unimpressive terminal with maximum holding capacity of 15 million passengers as claimed by BIA"

This disclosure and the apparent contradictions raise serious doubts about the commitment of the private partners, to the best interests of Bangalore, both short term and long term. The finger of suspicion, for refusing the additional investment, can be fairly pointed at Siemens, since it is the dominant private partner and has the most number of Directors on the board, at 5. As the CEO of the corporation, Mr. Brunner has to follow the instructions of the board.

Source : The Deccan Chronicle

Out of a total project funding of Rs. 2,015.23 Cr., the private partners have brought in only Rs. 326.70 Cr. i.e. about 16%. Despite being the minority funders, the private partners have been given inordinately high control and 40% of the equity.

One has to pause and think, whether it is this inordinate ceding of our rights to a private monopoly by government, that has resulted in Mr. Brunner's statement, in the Times, on "UDF being absolutely essential", “Only that will convince our shareholders to bring in more money for the second phase of development”. I am distressed by the implications of the message and angered by the dictation of terms.

In my recent article in praise of the operations at Bengaluru International Airport, I made the statement Trust will take time, and engagement is the method. Trust is a two way street. In an era of Corporate Governance, it is incumbent on any corporation, and its leadership to engage its stakeholders, including customers, with the highest levels of transparency and integrity, which breeds the required trust.

My good friend Syed, raises some very pertinent questions of government as well. Apart from being on the board of BIAL, they are responsible and duty-bound to uphold our rights.

1. Why are the GOK/GOI officials tight lipped?
2. Is it because, in our governing system, the ultimate authority lies in corridors of political bosses and their offices?
3. How do we empower these helpless (if they indeed are) souls to stand up for the public good?
4. How do we force the public partners to get emboldened and force the private partners to do the right thing?
5. How do we ensure that private partners in public infrastructure are actually held accountable for their follies?

All these years of dealing with politicians seems to have taught BIAL a thing or two. If BIAL does not want us Bangaloreans taking all their statements, as we do of our politicians, with a huge pinch of salt, it's time for BIAL, which includes government, to come out and tell us the whole truth, and nothing but the truth.

Rumours and news have it that all is not well at Kingfisher Airlines.

The expansion of the much vaunted and recently launched international services have been curtailed or delayed. The planned launch on the Mumbai London route has been indefinitely postponed. To use the 5 Airbus A330-200 aircraft currently in the fleet, 3 of which are parked on the ground, plans are being drawn to commence Mumbai-Hong Kong and Mumbai-Singapore. No news on the Bangalore-Singapore route.

The flagship Bangalore-San Francisco flight has been delayed.

I am not sure if the management at Kingfisher realises that unlike Bangalore London, they cannot commence the "Silicon" Bangalore - San Francisco flight with 10 days notice. NRI residing in the US, make their travel plans months in advance, and need to be courted. If Kingfisher misses the November-December peak period, as it appears to be, they might as well postpone the flight for the next 12 months. I wonder what they will do with those fancy Airbus A340-500 aircraft.

Manisha Singhal of Business Standard reports that Kingfisher Airlines is planning to cut 300 jobs, barely a fortnight after it launched international operations and integrated low-cost carrier Simplify Deccan with it. On Monday, 22-September-2008, the Dr. Vijay Mallya-promoted Kingfisher Airlines plans to issue notices and lay off at least 300 employees, about 95% of whom are from the erstwhile Deccan (now Kingfisher Red).

The move closely follows a recent announcement by JetLite, the fully-owned subsidiary of Naresh Goyal-promoted Jet Airways, that it was downsizing by at least 750 employees.

Kingfisher Airlines is reported to have a payout bill of around Rs 2.5 crore for the severance package. The separation scheme covers 200 employees in the airline's security department, another 50 from flight operations and around another 50 from engineering and maintenance, according to company sources.

Kingfisher Airlines, after taking a hit on account of rising crude prices, has cut flights by at least 22 per cent from its domestic and international network.

The airline has also confirmed deferring deliveries of at least 29 narrow-bodied aircraft and selling some of its wide-bodied A340 aircraft fleet. It is also restructuring its international operations.

The airline’s losses were pegged at Rs 4,000 crore for the last fiscal — before crude had soared to the levels of the past six months.

After reading the below story in The Mint, I can only shake my head and say ..."oh no not again!!!".

Both Bengaluru International Airport (BIAL) and Air Force Station (AFS) Yelahanka are vital to Bangalore. AFS Yelahanka is the premier training facility for the Indian Air Force (IAF) transport wing, and home to the internationally renowned AeroIndia show, which brings in millions if not billions of dollars worth of aviation related business to Bangalore.

The IAF is naturally wary of AAI air traffic controllers giving preference to civilian flights and do not want to loose control of their airspace. Yet safety is important.

BIAL and IAF need to engage with each other, without resorting to the complications which will arise when ministries get involved. IAF and BIAL can do we a neutral intermediary outside government to help them thrash issues out and arrive at a consensus.

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Bial’s second runway proposal irks IAF
Tarun Shukla

The air force objects to proposed location of the runway, saying proximity to its airbase may affect operations

Bangalore’s new airport, already buffeted by a court case and controversy over closure of the city-side airport it replaced, has hit another roadblock ahead of a much-needed expansion.
The Indian Air Force (IAF) has objected to the location of a proposed second runway saying it may be too close to its airbase nearby affecting operations.

A civil aviation ministry official termed IAF’s objections “unacceptable” and said it would be asked to re-examine its decision.

Among India’s top five airports by traffic, the new Bengaluru International Airport is facing public interest litigation in the Karnataka high court over alleged congestion during peak hours. The litigants, including a local citizens’ group in Bangalore, argue that a capital-intensive asset such as the Hindustan Aeronautics Ltd (HAL)-run old airport, which has been closed for commercial traffic since late May, shouldn’t be allowed to close, especially given the long commute time to the new airport.

The new airport, run by Bangalore International Airport Ltd, or Bial, is some 30km north-east of Bangalore, and was predicated on the old airport not competing with it.

Over the past few months, under growing criticism, the civil aviation ministry had asked Bial to speed up the process of second phase of expansion and match the overcapacity gaps it found in a study of the new airport. This meant that Bial would need to create a temporary “express terminal” building next to the existing terminal before a new runway and terminal can come up to the south of the current runway.

Construction work for the new runway, Bial says, is expected to start in July and finish in about three-four years. Planning and design of the runway is under way.

Locating the new runway to the south of the airport campus, spread over 4,000 acres, will mean restrictions on planes using the new runway because their flight path may stray into the airspace reserved for IAF’s airbase at Yelahanka close by. The base is mostly used for helicopter training.

“...we cannot come to the south as four miles (from the existing runway) is Yelahanka airspace. What we are telling is that a runway closer to Yelahanka will mean further restrictions,” a senior air traffic control official at Airports Authority of India said, asking not to be identified.

Bangalore airspace has to be carefully managed, the official said, after three large airspace corridors have emerged in the city, short distance of each other: that of the Bial airport, the old HAL airport and the Yelahanka airbase. In addition, the city hosts an airstrip on its northern suburbs that handles private planes and hobby aviation enthusiasts.

Aviation regulator Directorate General of Civil Aviation, or DGCA, had proposed that IAF shift its operations to the HAL airport, which is mostly unused except for charter, private and important aircraft movements.

But, IAF has rejected that request. “We are not shifting Yelahanka,” said vice chief of air staff air marshal P.V. Naik, adding IAF wanted the new runway, which will nearly double the capacity of the airport, to be built north of the existing one. The airport operator said it had been granted all clearances including those for the second runway as part of the original airport master plan finalized in 2004 but is currently in talks to arrive at a solution after the reservations made by IAF.

“The runways of the airbase at Yelahanka and those of our airport are absolutely parallel. Nevertheless, the air traffic management is coordinated. For this reason, (IAF) had worked out an integrated airspace management plan which was the basis for its NOC (no-objection certificate) for our project,” a Bial spokeswoman said.

Since its launch in May, the Bengaluru International Airport has had more than 2.42 million passengers pass through it and carriers such as Dragon Air, Tiger Airways, Oman Air and Air Mauritius have also started their operation recently.

The Union civil aviation ministry believes a new runway to the north of the airport is not feasible as it will require further acquisition of land. “Those (conditions) are not acceptable,” a ministry official, who did not wish to be quoted, said, adding the ministry is asking IAF to relook at its stance.

Back in June, I led a high level delegation of industries on a visit of the air cargo facilities run by Menzies Aviation Bobba Group, and Air India Singapore Airport Terminal Services at Bengaluru International Airport. (Read that article).

We observed that the Indian Customs Authority did not have a full presence at BIAL airport, despite earlier assurances to Industry in March 2008. To correct the situation, the Bangalore Chamber of Industry and Commerce (BCIC), made a representation to the local Customs office as well as to the Chairman of the Central Board of Excise and Customs to correct the lacuna.

The Chamber received the following letter from Customs recently, and it is self explanatory. Thanks to the Customs as well as many members of the Chamber who put in efforts.

OFFICE OF THE COMMISSIONER OF CUSTOMS,
CENTRAL REVENUES BUILDING, QUEEN’S ROAD, BANGALORE – 560001.

TRADE FACILITY No. 47/2008
Dated: 11/09/2008

Sub: Shifting of the Operations to the Air Cargo Complex at Devenahalli. Reg

Kind attention of the Importers, Exporters, Custom House Agents and all the concerned with the trade is hereby invited to the necessity of shifting the operations (Assessment, Bonds, Audit, Service Centre, Bank, etc.) to the Air Cargo Complex at Devenahalli, which are at present carried out from the old Air Cargo Complex premises near HAL Airport.

In this Connection, the trade is hereby informed that all such operations will be transferred to the new premises in a phased manner by middle of next month. To begin with, the Service Centre operations will be gradually shifted. All the major operations from the Service Centre will be available only from the new premises from 18th of September, 2008. Only two terminals will be made available at the old premises for facilitating Query reply and amendments. Hence, all the concerned are hereby advised to gradually shift their operations including payment of duty to the new Air Cargo Complex at Devanahalli accordingly.

Assessment and all other official functions currently operated from the old premises near HAL Airport are likely to be shifted to the new Air Cargo Complex at Devanahalli by the middle of next month.

A.K. KAUSHAL
COMMISSIONER OF CUSTOMS

The Times of India reports that air navigation services, could soon be hived off from the Airports Authority of India (AAI). In a move that would bring India in line with much of the world, these services could be free to upgrade, evolve and create another successful world-class corporation like the ONGC. Government plans are understood to be well on their way towards slimming AAI's responsibilities.

Airport operators in most other countries don't manage air traffic, explains a former civil aviation secretary, because they are generally private parties unlike India's state-controlled AAI. A sensitive service such as navigation is generally not left in private hands, he says, adding the focus is skewed here. "The focus in India is on visible infrastructure such as airports and terminal buildings and little on the crucial navigation services which would lead to seamless air travel," he says. Air Navigation Services (ANS) are responsible for roughly 2.8 million sq nautical miles of Indian airspace. With India increasingly seen as the hub between East and West, air traffic is expected to grow.

It is thought there is a conflict of interest between private airport operators in Delhi, Mumbai, Hyderabad and Bangalore and the government-owned AAI. ANS include communication, navigation, surveillance (CNS) and ATC. Civil aviation ministry sources admitted that "private operators felt AAI had undue advantage over them in levying various navigation charges."

Separating air navigation from overall airport management would not come a day too soon. This was recommended by the Naresh Chandra panel. Three years ago, the Roy Paul Committee too had recommended it. It criticized AAI's "recruitment and policies" for ATC which it described as "a unique and highly-specialised job, calling for a high degree of mental alertness." It added that AAI was "not capable of attracting high-quality manpower here and there's an urgent need for drastic changes." These may be in the offing.

The ministry asked consultancy firm KPMG to suggest the way forward. It recommended taking air navigation away from AAI.

Hive off Air Traffic Control: Create a separate ATC company that works for AAI on a contract basis. This would allow it to work for any air navigation company in the world. But this isn't feasible as this service is vital for the security of the country.

Hive off Air Navigation Services: Turn it into a government-owned corporation with AAI holding a stake and representation from the aviation sector. "It'll give them responsibility and credit for good performance and help them focus on their core function," say experts. This is the most likely scenario.

KPMG refused to comment.

An ATC source says, "We welcome this move. Though we generate 45% of the revenue for AAI, its investments are on other infrastructure. AAI should look at non-aeronautical sources of revenue such as hotels and amusement parks so that it can sustain itself without us."

Adds another ATC official, "A separate entity would give us the freedom to procure the latest radars and Instrument Landing Systems, tackle manpower shortages and enhance training facilities. Have a good management person to head it and see how it becomes a successful corporation like ONGC."

Private airport operators have welcomed the proposed autonomy for air navigation, saying such a move has worked well in other sectors, be it infotech, auto or telecom. "Anything which gives us efficient, safe air traffic services, whatever be the structure, is welcome. Old mindsets have to change. In a bureaucracy, procedures often overtake proficiency," says a source. Also, AAI should have invested the money it got from its assets on improving ATC services.

"Instead, it has behaved like a civil engineering department dealing with huge contracts," says a source. Hopefully, these air pockets may disappear soon.

The Centre for Asia Pacific Aviation reports that the Government of India has approved the Airports Authority of India (AAI) and Indian Space Reseach Organisation's (ISRO) proposal for the implementation of the GPS Aided Geo Augmented Navigation (GAGAN) project for seamless navigation over Indian airspace at an estimated cost of INR 7.74 Billion.

Ex-post facto approval has also been given to the amount of INR 1.48 Billion already spent in the first phase of the project. With GAGAN, India will be only the fourth country in the world to have a satellite based navigation system.

The management of airspace, a sovereign function, has been assigned to the AAI. The AAI presently uses ground based terrestrial navigation system for providing safe navigation over the Indian airspace. The ground based system has site limitations and range problems.

To overcome the limitations of ground based navigation systems, in 1993, the International Civil Aviation Organisation (ICAO) endorsed use of a Global Satellite Navigation System as a future Air Navigation System for Aviation. Following this, the AAI and ISRO entered into an MoU in 2001 for the implementation of the GAGAN project for seamless navigation over Indian airspace.

The United States has put in place a Global Positioning System (GPS) using 29 satellites at an altitude of 20,000 km orbit. However, the position accuracies required for precision approach and landing, for Civil Aviation, cannot be met by the core GPS constellation, due to the uncertainties in the position accuracies caused by Ionospheric delays, satellite ephemeris and clock errors. The constellation needs to be augmented to provide higher accuracy, reliability and integrity, with the help of a Space Based Augmentation System (SBAS).

In order to provide enhanced accuracies with integrity, reliability and continuity, it is essential to have an augmentation system capable of collecting data in two frequencies over the service area, separate these errors at the master control centre and communicate and correct message to the aviation user in the frequency as that of the core GPS.

To achieve this, an SBAS consisting of a geo-stationary space segment for the core constellation, a ground segment consisting of reference stations, the master control centre and an uplink earth station are required. The reference stations collect dual frequency data, which is communicated to the master control centre. At the master control centre, the errors are separated and the corrected navigation message is sent to the navigation transponder on board the geo stationary satellite, which translates it to the user GPS civil frequency. The GAGAN system proposes to augment the GPS data with the help of a geo stationary satellite to be launched by ISRO and the ground based infrastructure of reference stations, uplink earth stations and master control center created by the AAI.

The implementation of the GAGAN programme is being realized in two phases:

• GAGAN TDS phase (Technology Demonstration System) - to develop and demonstrate the technological capability. This phase was successfully tested and completed in August 2007.

• GAGAN FOP (Final Operation Phase) – to be implemented for operational use and to be certified by DGCA. This phase is expected to be completed by May 2011.

INR 1.48 Billion has already been spent in the TDS phase and the balance INR 6.26 Billion is to be spent in the FOP phase. Of this, the AAI contribution is expected to INR 5.96 Billion, from its internal resources, and ISRO’s contribution will be INR 1.78 Billion, from ISRO budget. The AAI has already spent INR 1 Billion and ISRO INR 480 million in the TDS phase.

Quietly, the team at BIAL, has been fixing the problems, to produce a smooth running and efficient airport.

On Saturday, 6-Sep-2008, I had the pleasure of visiting the new Bengaluru International Airport as a guest of BIAL Chief Operating Officer Marcel Hungelbuehler and Chief Commercial Officer Manisha Grover. I thank them for the hospitality and the openness.

The BIAL airport is humming like a well timed Swiss watch and almost all the kinks experienced by passengers have been addressed and operational efficiencies attained. Some basic issues are still awaiting action.

But, the leader he is, Marcel, is on a continuous improvement process, aiming for better and better.

Marcel and Manisha gave me full access to the inner workings of the airport. These are the parts of the airport, very few passengers will see, but this is where an airport performs efficiently and earns its money.

Check-in
We began at the check-in area. At 12 Noon, it was quite empty. The CUSS terminals will be up very soon, and "hand baggage only" passengers of the three major airlines at Bangalore, Jet, Kingfisher, and Indian will be the first beneficiaries. I was also informed that Kingfisher has already commenced a "roving" check-in agent who carries a portable device for checking-in passengers. Smooth.

Departure in-line 5 level security check
We carried on to the departure baggage make-up area. BIAL has a Siemens baggage handling system with in-line 5 level security. 3 levels are in the picture below. Level 4 is a hand-held explosive wipe and detection system, and Level 5 involves having the passenger open the bag physically, and if needed, they have a bomb-proof room besides the terminal. The whole system is handled by a highly secured operations centre staffed by BIAL employees. Very automated, very smooth, very fast and very secure.

Baggage area
Once your bags clear the security, they will be carried across to the baggage make-up area. There are three belts and loaders will either load them in trolleys, or put them in baggage containers. There is a scanning system which scans the baggage tags and catalogs the location and container details in to the master database at BIAL. Try to be on time at the gate. If you do not show up, it is very easy for the airline to trace exactly where your bags are, and off-load them in a jiffy.

The departure baggage make-up area has only one deficiency that I could observe. It is just about able to handle the current 4 wide-body flights simultaneously. This will prove to be a limiting factor till BIAL makes its next terminal.

We next proceeded out on the apron, where we watched VT-VJK, the first Kingfisher Airlines Airbus A330-200 aircraft, roll in from London as flight IT002. We were right at the nose. What a beautiful aircraft. Unfortunately, photography at the apron is prohibited. It would have made a great picture. The picture below was shot later. I really hope that the slots are improved at Heathrow. Right now, Dr. Mallya is forced to park his aircraft at both airports for long periods. Aircraft on the ground only cost, not earn, money.

The Passenger Boarding Bridge (aerobridge) was attached within 30 seconds of engine shut down. Passengers started de-planing within 3 minutes of engine shut down, and even though it was a pretty full flight, the last passengers was off within 9 minutes. Great show all around.

We then proceeded in to the arrival baggage area. Kingfisher has contracted all its ground handling to Globe Ground (connected to Lufthansa), and bags started rolling in within 9 minutes of arrival. The last of the bags were on the belt within 20 minutes. From its initial disasters, the ground handling at BIAL has improved phenomenally.

Partly due to environmental concerns, and partly due to the stuffy nature of baggage areas, BIAL has enforced an all electric vehicle policy in their baggage areas. For the few initial months, BIAL did allow diesel belching tractors, but not any more. It was nice to see that even IndiGo, which does its own ground handling, has bought Maini electric tugs. I am not implying that Mr. Bruce Ashby and his team were not environmentally concious earlier.

Runway maintenance
Every Saturday, from 1pm to 3pm, BIAL shuts down its runway for weekly maintenance. An army of dedicated staff, led by Chief Infrastructure Officer Thomas Rueppel and Vice President Hari, descend upon the runway (09-27) and start from both ends.

The runway is checked for friction loss (caused by tyre rubber build-up), and rubber is removed as needed. Then the runway is given a high pressure cleaning and checked for any asphalt removal.

Finally, the markings are re-painted as required. Alongside the truck (not in the photo), is an entire team, that runs, at least half the length of the runway, a good 2km.

There are also maintenance crews who water down the barren earthen patches to prevent sand blowing and the grass. Later, BIAL plans to put grass on these barren patches to check erosion.

Along with automated bird-chasers (common at all airports), there is an entire squad of shotgun wielding "bird guys" who chase away the birds. Sorry no tandoori pigeons or kites.

Great team dedication right from the top to the bottom.

Marcel in the thick of the action.

Maintenance

I have always maintained that Governments in general, and India, in particular, are weak when it comes to on-going maintenance. The private sector is much more committed. But I was really wowed by the way BIAL is maintaining the runway, and the airport. Clearly, their actions demonstrate a long term commitment to Bangalore.

I cannot agree with recent statements calling BIAL airport, shoddy. Sure, the terminal is not an architectural masterpiece, but to me efficiency and value for money, triumph, pomp and flair. The statement is completely unfair to the whole team at BIAL and belittles their efforts, that I have observed.

The Passenger Terminal Building (PTB)
A view of the PTB and the apron area. The little green building to the right is the Fire Station with state of the art fire and rescue trucks. On the extreme right, way out in the distance are the two Cargo Terminal Buildings of AI-SATS and Menzies-Bobba. The new mirror terminal will be constructed to the left of the existing terminal.

Think of the existing terminal as T1-A, and the mirror will be T1-B. The "Express Terminal" will be constructed just to the right of the existing terminal (when viewed from the air side).

However, hearing BIAL's description, I am not impressed. From a PR angle, it is the wrong signal to send. I still feel that it will behove BIAL management to enter in to a partnership with AAI and run the terminal at HAL airport. I can envision BIAL efficiency with HAL location. WOW!!!! For sure, Bangalore will be the envy of India.

Globe Ground, one of the ground handling agents at BIAL, has purchased the top of the line Contrac Cobus 3000 capable of carrying 112 passengers at a time. They cost almost Rs. 20 million each. Along side is the Rs. 6 million version from Ashok Leyland. Both are good. Click here for more details on the Cobus. AI-SATS needs to catch-up to Globe Ground.

Air-side Expansion
While driving around, I observed that the apron extension to the west of the PTB, is on hold. I was told "we are waiting for the UDF issue to be resolved". For brief while, I had the disturbing question floating in my head. Is BIAL out of money ?

I later learnt from some people at the airport (who shall remain anonymous), the apron expansion was given to some fly-by-night contractor and not L&T who constructed the first apron. Cost was the reason, for awarding the contract, and also the contractor fleeing, when he realised the true magnitude of work.

The air-side road leading up to the two cargo terminals is just one lane. I was informed that the road is being widened. Widening this road is critical. It cannot accommodate two pallets simultaneously, so the traffic is uni-directional, and it is impacting the cargo operations. BIAL needs to complete this on a war footing.

We headed back in to the terminal and I visited the fully automated Airport Operations Control Centre (AOCC). Arriving passengers, can see it from the outside. Just head to the extreme right of the building instead of going straight down the middle into the main arrival area.

All the airport apron operations, airlines' flight dispatchers, ground handlers, are all linked in to each other. Flight schedules are constantly updated. The ATC is tied in to AOCC. When a flight is on final, i.e. 10 minutes out, the system is auto-updated. Gates that were previously assigned, are checked for any conflicts, and the automated systems ensure optimal use of space. Other airports can take a page out of the optimisation manual, from BIAL. It was really very impressive and heartening at the same time. It now makes sense how BIAL can operate so close to full utilisation. However, it does leave thinner margins to accomodate any significant disruption or flight delays.

The new BIG toilets
As you head to the arrivals domestic arrivals hall, on the left is the new BIG spanking new toilets. There are 36 urinals, and I did not count the number of water closets. This is a big relief to domestic passengers. I was informed that the international side is already adequately catered for.

In the arrivals hall there is a new "VIP" lounge being constructed. This is meant for the "lesser" VIPs who are not entitled to the VIP terminal. This could partly explain why we kept hearing from our VIP "leaders" about the "lack of required facilities" at BIAL.

Ongoing issues and future plans
Over a brief lunch, I had a chance to ask about ongoing issues, UDF, Airport City, and the future plans of BIAL and the AAI assessment of the terminal.

BIAL does not agree with the conclusions of the AAI. There are certain assumptions made, that may not apply to BIAL. I feel it is an issue for AAI and BIAL to sort out.

The airport hotel construction is proceeding, but I did not see or hear of much progress on anything else. The airlines' offices building is on track, albietly delayed, but the temporary cargo village meant to house cargo and customs agents, is way behind its promised July delivery. There were some operational and administrative issues which have been sorted out. Unlike the airlines, to whom BIAL has given its own offices, the agents are working in gruelling conditions, having to commute from their city offices near HAL, daily. It was gratifying to hear the issues have been resolved and hopefully the offices will open within the next month.

BIAL is insistent on the UDF as proposed. I raised the issue of their development of non-aero revenues, including the SEZ and Airport City, which would help raise revenues and reduce UDF. BIAL prefers this option also, but the stumbling block is BIAPPA, the Bangalore International Airport Area Planning Authority. There is no master plan in place, and BIAL does not know how to get permission for construction. BIAL claims they cannot construct any non-aero commercial building in absence of bye-laws. The BIAPPA website features a set of bye-laws. The lack of progress can be partly attributed to the lack of a serious push on BIAL's part. Support to BIAL is available, but they, have to show genuine interest. Industry bodies like BCIC will be glad to help if requested to from BIAL.

There is inadequate parking or facilities for non-passenger users of the airport (cargo, employees, etc.). BIAL does not provide any shuttle bus service, and is depending on individual contractors, and they do not. There was an ignorance of ground realities, in some of the BIAL management, and this is not acceptable. I got the impression that, BIAL feels, it is responsible only for the passenger terminal. The simple fact of the matter is, they are the concessionaires and administrators of the whole 4,000 acres. It is incumbent on BIAL to provide adequate infrastructure and connectivity INSIDE the entire area and it has to ensure the complete comfort of ALL USERS.

The speaker system at the departure hall is still a pain point for BIAL, and the team is working towards a solution. The small font on the flight information displays is something not yet fully appreciated. May be travellers can give feedback to BIAL to appreciate this fact better.

The outside of the terminal is not as well maintained as the inside. The difference in the gleam of the floors is significant. I am sure BIAL will get to it soon. Chairs have been put outside the arrival gate.

The mirror terminal will be constructed to the east of the current terminal, which will double its capacity. The existing parking lot will become a multi-level car park. It is not yet been decided whether to put the train station at ground level or underground.

I proposed to BIAL some ideas received from knowledgeable folks at Praja and Skyscraper City, such as a dedicated dual level operation; arrivals at lower level and arrivals at upper level. BIAL is taking inputs, but is keeping the plans close to its chest right now.

One cannot fault them. Trust will take time, and engagement is the method.

Conclusion
The airport is the first and last impression a traveller has of the city, which makes it vital in any city's infrastructure. Warmth, comfort, efficiency, cost, connectivity (location), future-proofing, and engagement with local industry, are the key benchmarks.

The entire team at BIAL has been quietly making steady improvements to the airport. They are right up there with the best of the airports in terms of efficiency and engagement. High marks for warmth and comfort. Cost and future-proofing are weak areas that BIAL is addressing. Location and connectivity, while not BIAL's choice, require addressing; it is vital to their long term success.

Pentagon hands tanker tangle to next president
By Andrea Shalal-Esa and Jim Wolf

WASHINGTON (Reuters) - The U.S. Defence Department has ended for now a $35 billion (19.9 billion pound) transatlantic aerial-refuelling competition, handing a nagging seven-year headache to the next administration and boosting Boeing Co's (BA.N: Quote, Profile, Research) hopes to keep Airbus planes out of the Air Force fleet.

Defence Secretary Robert Gates told Congress on Wednesday the Pentagon was dropping plans to pick between revised tanker proposals from Boeing and Northrop Grumman Corp (NOC.N: Quote, Profile, Research) by January 20, when President George W. Bush leaves office.

The Air Force in February awarded the $35 billion, 179-plane program to a team of Northrop and Europe's EADS (EAD.PA: Quote, Profile, Research), parent of Boeing commercial archrival Airbus.

After Boeing protested its loss on procedural grounds, a congressional umpire found the Air Force made "significant errors" in evaluating the rival bids.

The Pentagon responded by preparing for a new round, spelling out more clearly the expanded fuel-carrying capabilities it was seeking, among other things.

Boeing, sole supplier of tankers to the U.S. Air Force for 50 years, is seeking to curb EADS' penetration of the rich U.S. military market. Also at stake are EADS plans to move production of A330 freighters from France to Alabama, partly to cash in on exchange rate fluctuations.

The tanker bidding has been complicated by lawmakers' efforts to bring home jobs and a renewed "Buy America" debate about protecting key aerospace manufacturing capabilities.

The Air Force calls acquiring new tankers its No. 1 acquisition priority. The new fleet would phase out Boeing-built KC-135 tankers, which have an average age of 47 years. Tankers are used to refuel other planes in mid-air, a critical component of projecting U.S. power around the globe.

Rather than hand over "an incomplete and possibly contested process," Gates said he wanted to give the next administration a free hand to determine the military requirements, funding levels and how to weigh the bids.

PRESIDENTIAL POLITICS

Democratic presidential candidate Sen. Barack Obama of Illinois, where Boeing is headquartered, believes the competition "will benefit from a fresh review," said Wendy Morigi, an Obama campaign spokeswoman.

Obama "will work to ensure that this review puts our national security and the American taxpayer first," she said in an e-mailed response. "Senator Obama is committed to getting this important contract right and to making sure that we are providing our men and women in uniform with the equipment and support they need."

Representatives of Republican presidential hopeful John McCain did not immediately respond to a request for comment.

As a member of the Senate Armed Services Committee, McCain led a drive in 2003 to kill an initial $23.5 billion Air Force plan to lease and buy 100 modified Boeing 767s as tankers.

McCain of Arizona denounced the original no-bid, sole-source plan as a taxpayer "ripoff" and sweetheart deal for Boeing, then reeling from drops in demand for commercial airliners after the September 11, 2001 attacks.

The proposed lease-purchase deal collapsed in 2004 amid a scandal that sent two Boeing executives, including the Air Force's one-time No. 2 arms buyer, to prison on conflict of interest charges.

MISTAKES AND MISSTEPS

"Over the past seven years the process has become enormously complex and emotional -- in no small part because of mistakes and missteps along the way by the Department of Defence," Gates told the House Armed Services Committee while discussing the wars in Iraq and Afghanistan.

"It is my judgment that in the time remaining to us, we can no longer complete a competition that would be viewed as fair and objective in this highly charged environment," he said.

What Gates called a "cooling off" period was a big gain for Chicago-based Boeing. It had threatened to withdraw from the now-cancelled competition unless given six months to prepare a new bid. It said the Air Force had made clear it was now seeking a larger plane than the modified 767 it originally offered.

Boeing cheered Gates' decision, calling it in U.S. forces' best interest to give "the appropriate time for this important and complex procurement to be conducted in a thorough and open competition."

Northrop Grumman, on the other hand, said it was extremely disappointed, "especially on behalf of our men and women in uniform who will now be denied a critically needed new tanker for years."

EADS had no immediate comment. Northrop's tanker would use an Airbus A330 airframe that would be assembled in Mobile, Alabama.

HANDICAPPING THE NEXT STAGE

The A330s are currently put together in Toulouse, France, using mainly French, German, British and Spanish parts. The Pentagon issued a stop-work order on Northrop's contract after Boeing challenged the choice. Boeing has been considering substituting its bigger 767-400 or even the 777 aircraft, in place of its 767-200ER model.

"Given McCain's history in regard to this program, one might handicap a slight advantage to Northrop/EADS should he be elected," said Harry Nourse of Bank of America Securities.

"If Obama wins, you could see some implementation of the 'Buy America' philosophy, which might favour Boeing," he said.

(With additional reporting by Bill Rigby in New York and Tim Hepher in Paris; editing by Tim Dobbyn)

© Thomson Reuters 2008 All rights reserved.
http://uk.reuters.com/article/businessNews/idUKN1041158420080911?sp=true

The volatility in aviation turbine fuel (ATR) has triggered GMR Hyderabad International Airport (GHIAL) to change gear from aero to non-aero operations.

Currently, revenues from aero operations contribute to three quarters of us total revenues. The rest comes turn non-aero operations. GHAIL is looking at reversing this ratio to offset the turbulence in global ATF prices. It is trying to emulate best practices adopted by some of the leading international airports in the world such as Memphis airport, which get a large chunk of their revenues from non-aero operations.

As part of its new strategy, the airport is exploring a tie-up with Agriculture and Processed Food Export Development Agency (APEDA) and freighter companies to enhance revenues from this segment according to a senior official in GMR.

“Our teams have gone to Memphis airport In the US, the global cargo centre, to study the cargo operation models. They will submit a detailed report after studying other airports in the US and Europe in the coming three months. We will rope in a consultant to design a plan to take the idea forward,” he said. With the presence of Federal Exchange and the largest cornea bank in the world, Memphis airport is the nerve centre of cargo operations across the world. For instance, 5,000 faulty laptops are brought to Memphis each day and airlifted overnight after repair at the airport. The GHIAL is exploring such a model here.
The airport will also open a separate website to facilitate banking transactions and cargo operations online. The Greenfield airport in Hyderabad has seen a drastic dip in air transport movements (ATM5) during the last few months due to the volatility in prices of aviation turbine fuel (ATF).

The airport had 260 to 270 ATMs a day in Jun-08. This has dropped to 210-220 in August, leading to a dip of 50 ATMs a day. Several airlines planning to start new trips have also defined their plans. “British Air for instance, has postponed new trips from Hyderabad from October to December this year said a GMR official

‘According to him, the airport expects a 15% increase in passenger traffic this year against 35% last year “ATF sale volumes have also come down from 800-850 kilo liters a day to 500 kilo liters a day in August” he said. Although the state-owned oil marketing companies cut ATF prices by over 16% on Sunday, this may not translate into cheaper airfares. The airport currently records eight million passengers a year and it is forecast to reach l2 million by20l0.

(c) Centre for Asia Pacific Aviation.

Jet Airways, announced, they will re-introduce their daily operations on the Pune-Bengaluru-Pune sectors, becoming the only airline to offer its passengers a same day return service between the two cities, effective September 11, 2008

Jet Airways will commence daily operations on the sector with Boeing 737 aircraft, complementing the airline’s existing (six days a week) service on the sector.

Flight 9W 460* (Pune-Bengaluru) will depart Pune at 0620 hrs, arriving in Bengaluru at 0740 hrs. On the return leg, flight 9W 459 (Bengaluru-Pune) will depart Bengaluru at 2100 hrs, arriving in Pune at 2220 hrs.

With the launch of these new, daily flights, Jet Airways will offer passengers an early morning departure from Pune and arrival in Bengaluru. The airline will also operate the last direct service out of Bengaluru to Pune, offering business travellers a full day to complete their work and return home, without the bother of an overnight stay.

*Subject to Government Approvals

Dismembering BAA should make it possible to develop a second hub airport for the capital and its region

AFTER years of being shamed by ever shabbier and more overcrowded airports, Britain is at last getting around to doing the right thing. On August 20th the Competition Commission, which investigates whether markets are working properly, released the damning findings of a 17-month study into the country’s airports. The report envisages the dismembering of BAA, the country’s dominant airports operator, as well as other proposals that amount to a wholesale rewrite of the government’s cherished aviation policy.

The commission blamed long delays, overcrowding and a shortage of capacity that has long bedevilled Heathrow, the world’s busiest international airport, on a flawed regulatory regime, poor policy and, most important of all, BAA’s ownership of the three main London airports—Heathrow, Gatwick and Stansted. It plans to force BAA to sell two of the three as well as another airport in Scotland.

The prescription may seem harsh, but so too were the findings that since BAA’s privatisation in 1987 the company has dragged its heels in building new terminals and runways. Last year for instance, Heathrow crammed some 68m hot and bothered passengers through terminals designed to accommodate 45m. Long queues, scruffy lounges and overpriced snack shops do little to endear it to passengers, who rate it far below international rivals, according to Skytrax, a research firm.

So overstretched are Heathrow’s runways, which operate at 99% of capacity compared with about 70% at most other large airports, that even the slightest hitch—a spot of fog, say, or a plane having to turn back with engine trouble—causes a cascade of delays to ripple through its flight schedules. Because of this a third of all flights at Heathrow are delayed by at least 15 minutes, a poor record compared with other large European hubs such as Amsterdam, where 21% of flights are delayed, and Frankfurt, where 24% are.

The hope is that once BAA’s monopoly around London is broken up, competition will force improvements at all three airports. Christopher Clarke, the commission’s deputy chairman, reckons that under separate owners each airport would press hard to get planning permission to build new runways and terminals. They would pay more attention to the needs of airlines and travellers, he thinks. The expectation is plausible. A queue of buyers has already lined up hoping to bid for Gatwick and Stansted, the two airports most likely to be sold. They are understood to be drawing up creative plans ranging from cheap and basic warehouses for low-cost carriers such as easyJet to luxurious lounges aimed at winning the hearts of frequent-flying businessmen.

The biggest loser from a shake-up will be BAA’s current owner, Ferrovial. The Spanish firm bought BAA for £10.1 billion ($18.8 billion) two years ago in a deal that seemed expensive at the time, although cunningly financed, since it spent barely £580m of its own money for BAA. But crunching credit markets have meant that BAA has struggled to refinance £13.3 billion of loans. It won support from its bondholders only when it agreed to ring-fence its London airports and to use their assets and income to back new bonds.

Air travellers will have to wait a while to see the benefits of BAA’s break-up. New facilities take time to build and London is unlikely to have any new runways before 2015, limiting the scope for competition between the three airports. Meanwhile some quick fixes could help. Paradoxically, one would be to reduce the number of flights at Heathrow. A study for London First, a group representing big businesses in the capital, found that cutting about 5% of Heathrow’s flights could lead to a 15% reduction in delayed flights.

Over the longer term, the real impediment to competition between London’s airports is Heathrow’s power as a hub. Because of its size, it benefits from “network effects” in that it can match incoming passengers with outgoing flights to hundreds of different cities. This makes it by far the most profitable of London’s three airports for airlines and explains why peak-time take-off and landing slots are traded for some £25m-30m a pair.

Given the huge demand for flights at Heathrow, it is tempting to think that it is the most sensible place to add new runways. This is precisely the case made by BAA, which along with the airlines like British Airways that have the biggest stake at the airport because of the slots they control, has been lobbying fiercely to add a third runway. But the argument is flawed.

There is little reason to think that an economy as large as London and its surrounding region cannot support two competing hub airports. If allowed to build a second runway, Gatwick could well become a second hub, and another runway there would bother fewer residents than at Heathrow. A decision to favour expansion at Gatwick would permit real competition, whereas at Heathrow it would entrench the airport’s dominance further.

Price regulators could play their part too by gradually easing their grip. Allowing Heathrow to raise its prices could well be the spur needed to encourage a group of airlines to move to Gatwick. Then Heathrow could concentrate on serving the business market, which prizes frequency and convenience over price. After the failure of two decades’ worth of government tinkering and ham-fisted regulation, it is time to see if markets can do a better job.

From The Economist print edition
Copyright © 2008 The Economist Newspaper and The Economist Group. All rights reserved.

Jet Airways, will connect Thiruvananthapuram and Muscat, with daily, direct flights, effective September 15, 2008.

Jet Airways will operate these services with its internationally-configured Boeing 737-800 aircraft with a two-class configuration: Première and Economy.

The new flight will complement Jet Airways’ existing daily service on the Mumbai-Muscat sector.

Jet 9W 530 (Thiruvananthapuram-Muscat) will depart Thiruvananthapuram at 0755 hrs and arrive Muscat at 1030 hrs. On the return leg, flight 9W 529 (Muscat-Thiruvananthapuram) will depart Muscat at 0030 hrs and arrive Thiruvananthapuram at 0535 hrs.

Announcing the launch of these services, Mr. Wolfgang Prock-Schauer, CEO, Jet Airways said, “In a remarkably short span of time, Jet Airways has established a dominant presence on the important Kerala-West Asia sector, on the strength of its superior in-flight product and service standards. In a bid to further enhance its connectivity on this sector, and in line with passenger demand, the airline is proud to be the first private Indian airline to connect Muscat and Thiruvananthapuram.”

With the launch of this new flight, Jet Airways will fly to six destinations in the Gulf (Kuwait, Bahrain, Muscat, Doha, Abu Dhabi and Dubai) from five gateway points in India: Kozhikode, Kochi, Thiruvananthapuram, Mumbai and Delhi.

Congratulations to the entire team at Bengaluru International Airport Limited for achieving 100 days of operations. I also acknowledge the hard work put in the two cargo terminal operators Menzies Aviation-Bobba and Air India-Singapore Airport Terminal Services, and all the other stake-holders at the BIAL airport. Most of the initial teething troubles have been addressed and rectified and the engagement of the management teams with industry is very encouraging and will be reciprocated.

BMTC has put in their wonderful Vayu Vajra service, and both BIAL and Bangaloreans should encourage their efforts with patronage.

There is no doubt that the new airport was desperately required, and it is a welcome addition to Bangalore’s infrastructure.

In the time that BIAL was being constructed i.e. 2005 – 2008, the air traffic in Bangalore grew 255%. No infrastructure project anywhere in the world can plan, let alone cater for, such explosive growth. Despite the slowdown in domestic air travel, international travel is on the upswing with airlines are making a beeline to Bangalore. Kingfisher, which commences its international operations on September 3rd, is only the latest entrant. Jet will commence very soon as well. The future is bright.

BIAL is, and should continue to remain, the primary airport of Bangalore. It is encouraging to hear that BIAL is expanding its capacity to cater for the constant growth.

Brazil is part of the BRIC economic classification along with India, and its major cities like Brasilia and Rio De Janeiro have air traffic patterns very similar to Bangalore. These cities have two airports. A small in-city domestic airport and a large out of town domestic and international airport. Both airports are operating as commercial successes.

In my opinion, it will behove BIAL management to consider extending its partnership with AAI and jointly run the terminal at HAL airport. The existing infrastructure is ready to be put to use, without any wait, and provides a means to bringing back to the skies, passengers lost to trains and buses.