As I sign off for the week, a light hearted story from British Airways with a serious intent.

There will be Red Noses on the ground and in the air at British Airways this week, in support of Comic Relief's Red Nose Day on 13 March.

(Picture by Nick Morrish/Seven Squared/BA News)

Staff will be encouraged to Do Something Funny for Money, by wearing Red Noses, and the airline has also painted Red Noses on a long haul Boeing 747, and two short haul Airbus aircraft.

The airline is asking all eagle-eyed photographers to send their uploaded pictures of the British Airways Red-Nose planes in flight to its Twitter page.

Comic Relief spends all the money raised through Red Nose Day to give extremely poor, vulnerable and disadvantaged people in the UK and Africa a helping hand to turn their lives around. For more information on Red Nose Day, go to their website www.rednoseday.com.

In this spirit of giving, I seek your support of Bangalore Aviation. Advertising income is donated to the Rotary Club of Bangalore for education of under-privileged gifted children. It only takes a couple of seconds of your time.

David Learmount at FlightGlobal has done an excellent analysis of the Global airline accidents. In the last ten years, 2008 is the second lowest, after 2004, in terms of fatalities.

Simple figures paint the picture: in 2003 there were 27 fatal airline accidents causing 702 deaths, and in 2008 there were 34 fatal accidents and 583 deaths. In the interim years the figures show that the trend for fatal accident numbers and the fatalities total are tracking the horizontal almost precisely. Although the number of deaths last year was relatively low at 583, the best result in the past decade was 466 in 2004.

One particular section regarding a breakdown in trust between pilots and their airlines is disconcerting.

The pilots at American Airlines and US Airways have both, independently, suspended their participation in their respective carrier's aviation safety action programme (ASAP), a voluntary incident reporting scheme intended to encourage the reporting of mishaps of all kinds that might otherwise have gone unnoticed.

FlightGlobal's complete list of all accident for 2008, in PDF format, can be downloaded here.

There are many road warriors who visit Bangalore Aviation regularly. We road warriors have a list of items we will never leave home, for a trip, without. This is my "crucial items list". Please share your list via a comment.

1. Blackberry
Love this GSM device from RIM. It is the device for the road warrior. The Nokia E series, iPhone, Windows Mobile, Treo, I have used them all, and dumped them; in favour of my Blackberry Curve 8310. I use it for my messaging (e-mail and SMS), basic internet, GPS, music, videos, and much more. Even do my blog with it. Works all over the world, with the exception of Japan and Korea, but then, I don't visit either country too much.

2. Cellular modem and my laptop
As incredulous as it sounds, I find public internet connectivity more difficult to find in India, than most countries I visit. Sure there are tons of Cyber-cafes, but very little connectivity for my laptop. For full featured internet on my laptop, I always pack my Tata Indicom CDMA based "data card" cellular modem. Any day better data throughput in India when compared to GSM, and no roaming charges. At the end of a hard day, in a foreign land with minimal English programming on TV, I crank up my laptop, and play one of my favourite movies. After going through enough brands, even today, I swear by the IBM er Lenovo ThinkPad. Toshiba and HP Pavilion are two brands I swear at.

3. Bose QuietComfort Headphones and eye-shades
These "anti noise" headphones are amazing. Again a TABF (tried all but failed) situation with Senhieser, Sharper Image, and others, I have forgotten. Expensive, but worth every penny. I use the "over the ear" QC2. Cover your ears with it, and flick the switch and it is blissful silence on-board even the nosiest aircraft. I lost one piece on a Lufthansa flight, and was in panic till I bought a replacement. The perfect companion to the headphones -- eye-shades. Cut out the light and catch up on some much needed sleep, whether catnaps on short flights, or extended snoozes on long ones.

4. Books, novels, and magazines
At least for little while, get away from those e-mails, spreadsheets and presentations. I never open my laptop on board a flight. I find reading a great way to educate and entertain myself. Friends often ask me, how come, I know so much about so many subjects. Now you know my secret. I learn from the masters, Tom Friedman, Paul Krugman, Tom Clancy, Nandan Nilekani, Jack Mingo, Harvard Business Review, Siddharth Basu, and a whole lot of others.

5. Business cards and holder
Globally, business cards are a must. In Asia, business card etiquette is an art by itself. Adequate quantity of cards, proper storage in a business card holder, proper presentation, holding the card with both hands, face up, facing the presentee(s), and presenting the card stating your name, in hierarchical senior to junior order. Your business card, don't leave home without it.

6. American Express card
I know this will sound like the ad cliché, but I do not leave for a trip without it. The Platinum Card has no spending limit, offers insurance on car rentals saving me money, Membership Rewards, the Concierge service, and once when I lost my card in the middle of nowhere, customer service came to the rescue.

7. Empty water bottle
Now that we are not allowed to carry water through security, and with diminishing service levels in the air, I make sure I carry a 500ml (20 fl. oz) water bottle on board, even if it is empty. Just before the flight doors close, I request the cabin crew to fill it up. This is the one time in the flight the crew is relatively relaxed and will gladly help. They also know, you will disturb them less during the flight, asking for water. As all of us road warriors know, airplane flights are very dehydrating and water is the best drink to have on board.

Share with us the things that you cannot, or will not, travel without ?

Happy 2009.

As we wake up to a new year, I bring you an interesting video I came across on YouTube, which shows the global air traffic over 24 hours. But speeded up to complete in one minute.

Air traffic follows the sun, at its peak during daylight, just like most human activity does.

In the initial stages of the video as it is day time in Asia and evening approaches in the Americas, there is massive activity in the USA, and hordes of flights being launched towards Europe over the Atlantic.

At the same time as morning approaches Europe, the flights start descending on to Europe from both east and west, which then return back mid-day in Europe.

There are interesting patterns along the South East Asia to North East Asia routes, and also South America to the Iberian peninsula.

But the flights to, from, and within the United States, whether trans-Atlantic or trans-Pacific is simply staggering.

I also invite your attention to the number of flights over India at night.

My sincere thanks to all the visitors of Bangalore Aviation.

Over the last two weeks you will observe that I have implemented changes in the site. I seek your feedback and comments on these changes. Good, great, bad or ugly.

Snap Shots

I installed a tool on this site called Snap Shots that enhances links with visual previews of the destination site, interactive excerpts of Wikipedia articles, MySpace profiles, IMDb profiles and Amazon products, display inline videos, RSS, MP3s, photos, stock charts and more.

Sometimes Snap Shots bring you the information you need, without your having to leave the site, while other times it lets you "look ahead," before deciding if you want to follow a link or not.

Should you decide this is not for you, just click the Options icon in the upper right corner of the Snap Shot and opt-out.

DISQUS Comments

The commenting system has been vastly improved with the addition of DISQUS. Hierarchical commenting now available, as well as a re-blog facility. If you would like to do a "You Tube", there is even a facility for recording your comments via video.

A multi-tab widget with recent comments, prolific people, and most popular articles has been added.

RSS Feeds and E-Mail subscriptions.

As previous, you can subscribe to the RSS feeds or subscribe via e-mail using the icons at the top of the page.

Thanks in advance for your time.

Devesh

The Centre for Asia Pacific Aviation reports that the International Air Transport Association (IATA) released international traffic data for Aug-08 that confirmed a continuing downturn.

International passenger demand growth slowed to 1.3%, following disappointing growth of 1.9% in July. Passenger load factors fell to 79.2% a sharp drop-off from the 81% recorded during the same period last year as capacity growth outpaced demand.

International freight traffic saw its third consecutive month of contraction with a 2.7% decline following drops of 1.9% in July and 0.8% in June.

Giovanni Bisignani, IATA’s Director General and CEO said, “Passenger traffic grew by 5.4% in the first half of the year. That slowed to 1.9% in July and 1.3% in August. The contrast between the first half of the year and the last two months is stark.” “The slowdown has been so sudden that airlines can’t adjust capacity quickly enough. While the drop in the oil price is welcome relief on the cost side, fuel remains 30% higher than a year ago. And with traffic growth continuing to decline, the industry is still heading for a US$5.2 billion loss this year.”

Bisignani said, Air freight has declined for the past three months, led by Asia Pacific carriers that posted a 6.5% decline in July and a 6.8% decline in August. “Airlines carry 35% by value of the goods traded internationally. The three-month decline - led by weakness in Asia-Pacific markets - is a clear indication that global trade is slowing down. This shows that the impact of the financial crisis is broad geographically and will worsen before it gets better.”

Passenger

• Asia Pacific carriers reported a 3.1% contraction, following a 0.5% decline in July. Economic distortions surrounding the Olympics in China and a weakening Japanese economic outlook contributed to the decline. While some recovery in this weak performance is expected in coming months, clearly the region’s economies are feeling the impact of the turmoil in the financial markets.
• Middle Eastern carriers saw traffic growth drop to 4.3% following 5.3% in July and well below the 10.6% growth recorded during the first 6 months of the year.
• In contrast, international passenger traffic carried by North American airlines accelerated from 4.2% growth in July to 5.2% in August, in Latin America from 8.1% to 11.9% and in Europe from 1.3% to 1.6%.
• August is usually the second strongest month of the year, but the 79.2% load factor achieved was 1.8% points lower than last year although scheduled capacity is planned to slow very sharply to the point where it barely grows by the end of the year.

Cargo

• The 6.8% decline in international freight shipped by carriers in the Asia Pacific region had the greatest impact as they comprise 45% of the global air cargo markets.
• The other big market players also showed weakness. European carriers experienced a 0.9% decline, while US carriers reported weak growth of 0.8%.
• Sharp declines in freight traffic in Latin America (-13.2%) reflect restructuring in Brazil with cuts in capacity.

Bisignani added,“The industry crisis is deepening and no region is immune. Urgent measures are needed. From taxation to charges and operational efficiencies, all areas impacting the business must be examined for ways to reduce costs and drive efficiencies. It’s a matter of survival.”

Despite this slowdown, foreign carriers are still bullish on India, and Bangalore in particular. Emirates in is the process of adding its 3rd daily flight, and is today the dominant foreign airline in Bangalore.

Foreign airlines flock to India, ignore global downturn

India is seen as a growing market for international airline traffic and the current market size is nearly $5 billion (Rs 21,000 cr) a year

They are cutting flights to several destinations in the wake of a worldwide slump in business, but international airlines are doing just the opposite in India because they believe the country’s international air traffic will only grow in the coming years.

Interestingly, this comes even as the domestic aviation business is going through a downturn.

Large carriers already operating here such as British Airways and Emirates are either increasing the number of flights to Indian cities they already fly to, or beginning to fly to new cities, while smaller players such RAK Airways and Garuda Indonesia are starting to fly into the country.

India is seen as a growing market for international airline traffic and the current market size is nearly $5 billion (Rs21,000 crore) a year, said a senior official with a foreign airline.

“India, with its huge middle-class population of over 250 million, is like an untapped gold mine,” said K. Ravindran, chief operating officer, RAK Airways, which started operations in India from April, flying between Kozhikode and Ras al-Khaimah in the United Arab Emirates. “With its present international travel market not even covering 2% of the population, the country offers large opportunities for airlines. India is an important geographic area in all our future network plans.”

ON THE RADAR

Kapil Kaul, chief executive officer (Indian subcontinent and West Asia) of consulting firm Centre for Asia Pacific Aviation, said India is a critical destination for international airlines based on the “various dynamics of competition and consolidation of their network”.

“So, when a rebound happens there (in global markets), these carriers will have an advantage as they would have already built capacities in India,” he added.

Deutsche Lufthansa AG, Singapore Airlines Ltd, Cathay Pacific Airways Ltd, British Airways Plc. (BA) and Emirates are in the process of increasing the frequency of their flights and connecting new destinations here.

Hong Kong Dragon Airlines Ltd (an affiliate of Cathay Pacific), Saudi Arabia’s Sama LelTayaran Co. Ltd (popularly known as Sama), and AirAsia Berhad are also launching operations in the country.

This surge, Kaul said, is also because international airlines are trying to gain a foothold in the India-bound market before domestic private carriers Jet Airways (India) Ltd and Kingfisher Airlines Ltd grow into a threat.

Jet launched its international operations in 2004 and Kingfisher will start flying overseas routes from September.

“Other reasons include a nearly liberalized bilateral government policy with other countries and sustained economic growth amidst recession,” he added.

For instance, Emirates, which recently increased the frequency of its Delhi-Dubai flights, is readying for another round of expansion by increasing the number of flights to Hyderabad and Bangalore from October.

Singapore Airlines is also adding five flights on its Delhi-Singapore sector from September, taking its total flights to Indian cities to 63.

“We will be adding two more flights in Bangalore as India is our key market,” said Gunjn Chanana, public relations manager for India at Singapore Airlines, without disclosing the airline’s growth rates here. “We believe there is potential (for more) growth.”

“India today is by far the largest single market for Qatar Airways with a network of nine cities, which represents more than 10% of our global network of 83 international routes,” said Qatar Airways’ chief executive officer Akbar Al Baker in an email.

Qatar Airways added Kozhikode as its ninth destination in India in June.

The global aviation industry is waging a losing battle against rising aviation fuel costs, which have increased 30% this year.

However, international airlines expect potential passenger growth from India to nullify the impact over the long term.

“For example, we have registered a load factor of 86% during the first half of this year in the India-Sharjah sector,” said Housam Raydan, corporate communications manager, Air Arabia PJSC which operates 86 flights a week between Sharjah and India.

Much of the rise in international air travel from India is driven by traffic to South-East Asian countries, while demand for destinations in the US, Australia and New Zealand is also increasing.

“The overall (number of) Indian arrivals to Malaysia from January to May 2008 is 234,245, a growth of 32.5% from last year. Similarly, Singapore has also witnessed above-average growth,” said Neelu Singh, chief operating officer, Ezeego1.com, a Mumbai-based online travel agency.

Naresh Goyal, founder chairman of Jet Airways, had said in an earlier conversation with Mint that Indian airlines pose a serious threat to international carriers on account of the quality of their service.

He had added that Jet, which earns nearly half of its operating revenues from international operations, would extend its global reach to other cities in North America, Europe, Africa and Asia in phases.

“However, international carriers will have to be a bit cautious in increasing their capacities considering the current downturn,” said Wolfgang Prock-Schauer, chief executive officer of Jet Airways.

His warning holds merit as three carriers—Linee Aeree Italiane SpA (Alitalia), Eva Air (Taiwan) and British Midland Airways Ltd—have suspended their Indian operations over the past two years, because of intense competition.

Ryanair Ltd, United Air Lines Inc., US Airways Inc., Qantas Airways Ltd and BA have either deferred, or cancelled their international flights to various cities owing to the high jet fuel prices.

Source : The Mint

From October 1, 2008, airlines in India are going to stop paying commissions on their tickets sales by travel agents.

Travel agents are understandably incensed. Until about a year ago they used to earn 9% commission, which was dropped to 5%, and in another 2 months, will drop to 0.

Industry experts say most small agents will shut shop, while the bigger ones will earn special bonuses, instead of commission, from airlines, which will get increased, even further, thanks to the smaller agents closing down.

The various travel agents' associations, whose members account for 85% of tickets sold, have threatened to stop selling air tickets, which will impact the Rs. 33,000 Crore airline industry in India.

For many smart customers, travel agents were already operating in the Zero Commission regime, since we would take back the commission, in the form of discounts.

Painful as it is, it is time for travel agents in India, to start walking the extra mile to earn their commissions. As a customer I do not need to pay 5% to a travel agent to just do an online booking that I can do myself. In most mature markets, travel agents receive no commission from the airline, and charge service fees, which demands the provision of value addded services.

For many years, I have been telling my travel agent friends that they need to provide services commensurate with their commissions. Start providing holistic travel related services. Hotels, car rentals, visa and passport services, travel insurance, travel advice, and tours, are just some of the areas they must look at.

Online travel agents, such as Ezeego1.com, Cleartrip.com, Yatra.com and Makemytrip.com have already started finding alternative sources of revenue. Some these agents have less than 30% of their total revenues coming from airline bookings.

Agents who develop skills and offer services that help the customer find better deals, and an easier travel experience, will survive, others will just disappear in to history.

India, the world's largest democracy, has a sorry record in sound and bold economic administration. Populist measures abound, and nothing is sacred or immoral in the perpetual quest to obtain and then secure the "gaddi".

Fuel pricing in India is a prime example.

Officially, the "Administered Price Mechanism" was abolished in 2002, but today, the Indian government has a greater control on the fuel market and prices than ever before. Private operators have been driven out of the market, and only the Government owned companies survive.

Government have become addicted to their windfall fuel tax income. In the last 6 years, fuel tax collections have increased almost 250% to a staggering Rs. 170,000 Crores (Rs. 1.7 trillion or US$ 41 Billion).
Indian bureaucrats have learnt well from the Europeans and their "tax and spend" Keynesian economic models. Fuel taxes are greater than the cost of the fuel. In Bangalore, when we pay Rs. 57 for a litre of Petrol, Rs. 32 is taxes, only Rs. 25 is the cost of the actual fuel. Internationally, the cost High Speed Diesel ex-refinery (excluding taxes, duties, levies, etc), is marginally higher than Petrol. Yet, in India, Diesel costs 35% less than Petrol, thanks to lopsided tariffs and populist driven subsidies.

The one fuel that is truly free in pricing is Aviation Turbine Fuel (ATF). Thanks to the government induced haemorrhaging, and the traditional, but wrong view, of air travel being a luxury, oil companies are using deregulation on their favourite whipping boy -- ATF. In India, ATF costs double than prevailing international prices.

The results are plain to see. Despite being leaders in the global airline growth story, airlines in India, today, are bleeding, and bleeding bad. Losses in 2008-9 fiscal, are expected to cross $2 billion. Unable to sustain, in sheer desperation, airlines are hiking air fares, cutting back schedules, deferring aircraft deliveries, laying off staff, even considering importing their own fuel.......... in short, anything, to cut down losses.

This has resulted in air traffic crashing all across India. In Bangalore, the shining example of India's air traffic growth, from an annual growth rate of 33% year on year, for the first time since 2001, air traffic is actually falling to levels below that of the previous year.

Additionally, due to the remoteness of BIAL airport, regional air traffic is decimated, with air passengers switching to trains and buses instead. We might be tempted to say "so what". But we overlook the productivity aspects in the slower transit time of trains and buses. And in today's globally competitive economy, productivity matters.....a lot.

The operators of the Bengaluru International Airport, BIAL, now face an additional quandary. The airport terminal is reportedly, under capacity, and needs immediate expansion. Till now, their primary source of revenue, has been landing charges levied on flights. Thanks to a reduction in flight operations by the airlines, their income stream and cash flows have been reduced. So BIAL is increasingly forced to rely on passenger based User Development Fee (UDF), which has both the Government and passengers united in their opposition.

An imposition of UDF by BIAL on domestic passengers will only aggravate the already bad situation, and result in a further compression of air traffic. A downward spiral into a bottomless pit.

A possible solution requires bold decisions. Something both the political and administrative establishment in India are not known for.

• Government has to pledge at least 10% of its fuel taxes towards public transportation infrastructure. My friends in the auto industry will hate me for this suggestion, but our cities are choking in their own growth.
  
• ATF pricing should be reduced to international price parity. Ex-refinery, and taxes, union and state. Everyone should share the burden, including the airports and airlines. They must pass on the savings and re-invigorate the market, not use it to butress their bottom lines. The downstream impact of the aviation industry is far greater than the losses sustained by price reduction. We must not forget, every aircraft purchased by India, results in huge "offsets" i.e. mandatory exports of other goods and services.
  
• A moratorium on UDF for at least 12 months by all airports in India. Keep costs low. It will pinch, but the increase in flight operations will butress some of the revenue loss.
  
• Allow HAL airport to handle regional air traffic. By sticking to its hardline, BIAL will only continue to drive passengers away from the air, to trains and buses. A negative for all stake holders, including the citizens of Bangalore.
  
• Diverting part of the regional traffic to HAL will also give BIAL breathing room, and delay the need for investment in a costly second terminal, till global economic conditions improve.
• Forget a "temporary terminal". Passengers will not accept travelling 50km, paying a UDF, and then using a "tent".

This is just one view point. Other constructive suggestions are welcome via the comments section.

An official study by the Airports Authority of India assesses the annual passenger capacity of HAL Airport at 8 million passengers. 6.5 million domestic terminal and 1.5 million international terminal.

This is contrary to popular belief of 3.5 million passengers.

According to Mr. B.R. Sena, General Manager, AAI, Bangalore, the figure of 3.5 million is based on extremely old assessments. AAI has added the international terminal building, and increased the size of the existing domestic departure terminal since then.

Paramount Airways adds new routes to its network
Will enhance operations from 62 flights to 66 flights a day in the following weeks
By TBM Staff | Chennai

Madurai based, Paramount Airways is planning to enhance its operations from 62 flights a day to 66 flights a day in the following weeks. The new routes include Bangalore-Vishakapatnam (direct), Chennai-Vishakapatnam (direct) and Chennai-Tiruchipalli (daily). Paramount Airways will also double the frequency of its flights on the Chennai-Tiruvananthapuram route. The airline also plans to launch flights on Chennai-Pune route by July end or first week of August this year. It will induct two new Embraer aircraft in its fleet by end of next month, taking its fleet size to nine. The airline is expanding its route network at a time when most carriers are cutting routes to reduce losses on account of the rising cost of Aviation Turbine Fuel (ATF).

According to M Thiagarajan, Managing Director, Paramount Airways, they have not been affected due to the rising ATF prices, since they do not cater to the train passengers like most other low cost carriers. Paramount Airways, which caters to the top end of the market feels, that the price elasticity of their customers is better and an increase of Rs 500 or Rs 1,000 in the fares does not affect its target group. As per the Ministry of Civil Aviation (MoCA) statistics, Paramount Airways recorded the highest seat factor for May, 2008. The seat factor for Paramount was 81.2 per cent, while that for Air India (domestic), Jet Airways, Deccan and Kingfisher Airlines was recorded at 61.2 per cent, 73.9 per cent, 71.5 per cent and 70.1 per cent respectively.

Source : TravelBiz Monitor

The high prices of ATF (Aviation Turbine Fuel) have the airlines in India in a tizzy. They are cutting back services, begging for a reduction in fuel taxes, sub-leasing their aircraft, basically, anything, which will help stop their haemorrhaging losses.

Karnataka has one the highest prices of ATF in the country due to its high taxes, and faces pressure for their reduction. The Government of Karnataka has an ace in its sleeve that can help airlines flying in to Bangalore save some money. An ace, they are unaware of -- HAL airport.

Many times, weather conditions, ATC congestion or an airport closure, does not allow a flight to land immediately. International aviation safety rules require a flight to carry enough extra fuel to hover over the destination airport, for a certain amount of time, and then fly on, to an "alternate airport". We have seen flights being diverted from Mumbai to Ahmedabad, Delhi to Jaipur, and Bangalore to Chennai.

These diversions add about 30~45 minutes of flying time, which translates to about 2 tons of fuel for an single aisle jet like the Boeing 737 or Airbus 320. For shorter flights this means the flight carries double the actual fuel required.

In the air, weight equals money. Even if a flight does not go to the alternate airport, it still has to carry the extra fuel and its consequent weight. Weight that could be otherwise utilised for commercial gain like carrying cargo, or savings by not carrying it.

In the rush of closing HAL for commercial flights, the Ministry of Civil Aviation, seems to have overlooked the fact that HAL is still, a fully functioning airport for all non-commercial flights. i.e. private, charters, defence, and has all the needed infrastructure to act as an alternate airport. To top it off, HAL is just 7 minutes flight time from BIAL.

If HAL airport is permitted to act as an "alternate" airport to BIAL, flights can reduce their "alternate airport" fuel requirement. Today, they would be grateful for the savings this will realise.

The managements, of both, Bengaluru International Airport Limited (BIAL), and, of their partners, have been going hammer and tongs for the last 18 days, correcting problems. Many of the "teething problems" have been addressed, the few others, hopefully, very soon.

However, the passenger terminal building (PTB) is not a "teething issue", and needs to be expanded on a war footing.

I am comparing the PTBs of Singapore's Changi Airport, Beijing Capital International Airport (BCIA), Rajiv Gandhi International Airport (RGIA), Hyderabad, and Bengaluru International Airport (BIAL), Bangalore.

The graph below shows a comparison in terms of terminal area and annual passenger capacity.

Airport terminals are becoming larger in terms of area per passenger. Case in point, Singapore Changi, consistently rated as the best airport in the world. Despite an acute shortage of land in tiny Singapore, Changi's new Terminal 3, is considerably bigger than the equally luxurious Terminal 2, despite having a lower rated capacity.

Click on the image to enlarge.

Delving in to the details, some startling truths come forth.

Singapore Changi Terminal 2 and Terminal 3, and Beijing Capital International Terminal 3 (which holds the record as the single largest terminal in the world), have a per daily passenger terminal area, THREE times larger than BIAL.

Even the low featured stripped down Changi Budget Terminal, which serves only the Low Cost Airlines (LCAs), and Hyderbad's Rajiv Gandhi International Airport, have a passenger-terminal area ratio 33% greater than BIAL.

Is it small wonder, why the BIAL airport terminal appears so crowded from the day it opened ?

Click on the image to enlarge.

A similar shortfall in capacity, when compared to international airports, is evident, in the baggage handling capacity, but that can get addressed during the expansion.

One reads wildly differing figures on BIAL's terminal capacity, annual passenger capacity claims range from 11 million to 15 million. The BIAL official website claims "The current airport infrastructure is designed to handle over 11 million passenger movements annually. Once the final master plan has been achieved, it can accommodate upto 50 million passenger movements annually".

Bangalore achieved 10.12 million passengers in the financial year Apr 2007 - March 2008. With an 11 million annual capacity, BIAL's terminal, allows for less than 10% expansion. In the past 3 years, 2005 - 2008, Bangalore has achieved 250% growth, in passenger traffic. Admittedly, there has been a contraction in the growth rate, due to the high fuel prices, and loss of passengers on the short haul flights to rail and road, but a 10% increase in passenger traffic is expected in the next 12 months.

The chart below shows the passenger traffic over the last 2 years at Bangalore.

Click on the image to enlarge.

Using the data from the financial year Apr 2007-March 2008, I extrapolated the average number of passengers per domestic flight. As per BIAL, the maximum number of passengers per hour it can handle is 2,733. We also know, during peak hours, the maximum number of flights per hour is 30.

Modelling the peak hour traffic, at 30 domestic flights per hour, using last year's average passengers per flight, and BIAL terminal's peak capacity of 2,733 passengers, a startling figure emerges.

Click on the image to enlarge.

BIAL will be at 90% and above capacity for 11 of the 12 months in the year, and at 95% for the year as a whole. For 4 months, BIAL terminal is close to 100% of capacity.

Running so close to capacity will work only if the situation runs perfectly like a Swiss watch, and we know that is not the case in India. It also does not allow for any any future expansion, a situation, that is equally unpalatable to BIAL as it is to many of us.

I am sure, the BIAL consortium wants an airport that promotes Bangalore's progress, not impede it.

The expansion of the Passenger Terminal Building has to be taken up on a war footing.

All the images are my copyright.

It is approaching 2 weeks since the launch of the new Bengaluru International Airport and the management of BIAL has been making steady progress in solving the multitude of problems present.

Before I offer some suggestions for BIAL management for their consideration, I make an open offer to BIAL management, on behalf of the Bangalore Chamber of Industry and Commerce. We want BIAL to succeed. We are here to understand and help. In return we ask for transparency, trust, and sincere engagement from BIAL.

Now the suggestions :

Most important : HAL is now closed. Passengers may provide a "honeymoon period", but industry cannot afford to. Services have to be delivered, and NOW!!!!!

1. Airport Flow
a.
Add your own security staff to monitor and govern flow of vehicles inside BIAL airport land.
b.
Add overhead signage indicating the correct lanes for (a) parking (b) pick-up and drop-off. The over-zealous parking attendants crowd the entrance lanes trying to divert all vehicles in to the paid parking, which only adds to the chaos.
c.
Prevent service road encroachment by parked Lorries and Vans, up to and including the fuel farm. Once the cargo village gets going it will become a mess of monster proportions.
d.
Expand the service road to 4 lanes. The current 2 lanes will not cope with the multitudes of commercial vehicles already choking the road.
e.
Consider making the service road "one-way" East to West. The main access road can be used as the West to East access for all vehicles.

2. Passenger Terminal and Services
a.
While not expecting BIAL to become a picnic spot, add seating for visitors to the airport, and add public toilets outside the terminal. Visitors may not be paying to enter the terminal, but a certain level of Corporate Social Responsibility (CSR) is good business.
b.
Add a canopy from the terminal till the bus stand. It will aid and promote the usage of the Vayu Vajra services. In these times of high inflation, helping a passenger save money is good business.
c.
Expand the terminal on a war footing. The terminal design is modular and can be rapidly expanded. 71,000 sq. mtrs., is simply unable to cope with the demand. An overflowing departure lounge only diminishes the goodwill BIAL commands, and will lessen your "honeymoon period".
d.
Do not add additional retail space in the expansion. The current over-dedication to retail can be lowered by re-distributing the shops.
e.
Increase the apron, parking stands and gates. 42 Code C stands which includes 8 contact gates for 450+ flights a day is simply not enough. At the peak of 30 flights per hour, it will get overwhelmed if there is the slightest hiccup.
f.
Increase the number of toilets inside the terminal
g.
Stick to your guns on only 2 ground handling agents only if you can ensure their performance
h.
Provide permanent, good low priced, facilities for your customers' and partners' employees. i.e. airline staff, regulatory agencies (Customs, CISF, Immigration), cargo employees, etc.
i.
Speak to CISF Commandant, make them understand the need to use all the entrances to the terminal, and all the DFMDs/X-Ray scanners.

3. Services and Cargo

Cargo is the core reason of an airport, as far as industry is concerned. With the lack of a seaport in Bangalore the criticality only increases adding to the pressure.

India ranks a lowly 39th in the World Bank's Logistics Performance Index. In all crucial benchmarks India was below rank 40, only the competence of the people in the clearing process (customs excluded) at rank 31, salvaged the overall ranking. This has to improve, and Bangalore has always led the way.

Both the warehouses (Menzies Bobba and AI-SATS) have not taken advantage of the 2 month delay, and are just not ready. Their services are not up to international standards. From reports of airlines, air cargo agents, customs house agents, the situation will stabilise only after 1~1.5 months. This is simply unacceptable. It needs to be set right in 15 days.

BIAL was brought in to deliver a "world class" airport, and this includes cargo. If any of the cargo terminal operators cannot deliver results, they should be suspended from operation till they improve.

India has established the WRDA, and BIAL management has to realise that it is ultimately responsible for delivering "Global Service Quality" levels. It needs to be the big, bad, bar bouncer, and push its people and partners, in to delivering.

a.
BIAL management needs to recognise that cargo and logistics operations are a vital part of an airport and its interaction with a much larger hinterland, when compared to the passenger catchment area.
b.
BIAL needs to make a parking for all the commercial vehicles at the airport. The service road is choked with lorries, LCVs, mini-trucks, goods auto-rickshaws, etc.
c.
Need to enforce basic GMP and GS1 standards in warehousing.
d.
Create a joint Cargo-Terminal, Airline, Cargo-Agent, Customs-Agent and Industry Chambers task force that will meet and measure, on a monthly basis the :

• Effectiveness and Efficiency of the clearing process
• Infrastructure
• Ease and affordability
• Competence of the clearance process and people
  
• Package Traceability
• Reliability and repeatability i.e. confidence level

e.
Bring in the managements of both Menzies Aviation Bobba and Air India-Singapore Airport Terminal Services and get categoric commitments on SLAs for the following :

• Import Bonding - Target 3 hours
• Import IGM filing - Target 3 hours (if airlines do not comply, ban them)
• Cargo Traceability - No more than 1 hour. GMP or GS1 standards.
  
• Exports - Target 2 hours
• Goods vehicle parking - No truck should stand on the service road
• Infrastructure
  

f.
Strongly consider adding a third cargo terminal, but ensure you get a very high quality vendor.
g.
Add specialist warehousing options, to increase the value proposition. For example Frozen (below 20 Deg C), Chilled (-4 to +4 Deg C), Cold Room (+4 to +15 Deg C) abilities.
h.
Provide public facilities and toilets for the employees.

Long term
a.
BIAL needs to engage Bangalore; its industry, its commerce, its residents. Operate in an open and transparent manner.
b.
Show Bangalore its long term plans, especially expansion. Some specific points can include :

• Status of second phase
• Permissions for the second runway
• SLAs 1 year from airport opening date (AOD)

c.
Bring in the full expertise of Unique Zurich organisation. Marry it to local competence and understanding. Instead of looking for a Civil Engineer to head the 2nd phase expansion, try and find competencies in other fields. The top person for phase 2, has to focus on efficient process and overall customer delight, not worry about how to make a building.

I hope BIAL finds these suggestions helpful. I invite readers to please add to the list by using the comments option.

Govt may not implement new ground-handling policy
BS Reporter / New Delhi June 05, 2008

The recent dispute between the Bengaluru International Airport Limited (BIAL) and Indian carriers may make the government go back on its decision to implement the new ground-handling policy next year.

According to sources in the civil aviation ministry, Bengaluru International Airport Limited (BIAL) has said that no domestic airline with a market share of below 25 per cent will be allowed to do its own ground-handling at the airport. This means that none of the Indian carriers will qualify for ground-handling. Because, even Jet Airways, the largest airline in terms of passenger numbers, commands a market share of only 21 per cent as per April 2008 figures.

BIAL has reportedly taken this stand despite the fact that the government had recently decided to allow domestic carriers to do their own ground-handling till the end of this year.

The BIAL issue was brought up today by Delhi-based low-cost carrier IndiGo, one of the airlines to be prevented by the airport authorities from ground-handling last week. According to civil aviation ministry sources, Director General of Civil Aviation (DGCA) Kanu Gohain shot off a letter to BIAL yesterday, insisting the airport has to adhere to the government policy of allowing airlines to do ground-handling. In today's meeting with airport executives, including BIAL representatives, Chawla made it clear all airlines would have to be allowed to carry on with their own ground-handling till the end of this year.

When asked, a BIAL executive said, "BIAL has always maintained that having at least two professional ground-handlers not only makes for a competitive environment in terms of service quality and price, but also has a direct impact on the airside safety and security. However, post the meeting with the ministry today, BIAL supports the decision taken."

Industry sources said that with airlines reacting strongly to the new ground-handling policy, the government might take a second look at implementing it from next year.

"The ministry will look at whether self-handling is more economical for airlines than getting the same job done by external agencies. If yes, it might work towards letting the old policy of allowing airlines to do their own ground-handling continue," said a ministry official.

Under the new ground-handling policy to be implemented across all airports in the country from January 1, 2009, the airport operator or a joint venture company, subsidiaries of Air India or Indian Airlines, or their joint ventures, or any other ground-handling service provider selected through competitive bidding on a revenue-sharing basis will only be allowed to offer the services.

Airlines have been opposing the policy saying that outsourcing the work to an external agent will considerably increase their expenditure, pushing them further into the red.

As an interim measure to settle the problems of airport charges before the Airport Economic Regulatory Authority (AERA) is set up, the civil aviation ministry today announced the constitution of a 10-member committee comprising members of the Airports Authority of India (AAI), private airports and airlines. This was announced at a meeting held between the ministry, airline and airport executives to look into issues like price hike in aviation turbine fuel (ATF) and high airport charges among others.

"The body will look at what can be done to ease the problems faced by the airlines due to high airport charges," said a ministry official.

May 22, 2008
Bangalore Journal
An Indian Airport Hurries to Make the First Flight
By SOMINI SENGUPTA

BANGALORE, India — For years, frequent fliers in this technology hub complained bitterly about having to suffer the indignities of a tattered and tiny airport scrunched in the middle of a busy city neighborhood.

Now, with a new one opening on Saturday, people are clamoring once more. This time, to keep the old airport open.

The reversal does not reflect a sudden bout of nostalgia, but rather the fear that the new airport, no matter how modern it was intended to be, seems destined to be the latest repository of India’s astonishing inability to plan for its future and fix its sagging infrastructure.

The way things stand now, the trip to the new airport, 21 miles outside town, will easily take 90 minutes from the city center, and even longer from the software companies that have turned Bangalore, also known as Bengaluru, into India’s own Silicon Valley.

India’s famously sluggish bureaucracy has meant that workers are only now scrambling to finish widening the main road to the new airport. The city water supply has yet to reach the area, making it impossible to begin construction on the shops and office towers that are supposed to sprout around the airport. Even though airport officials were ready to open on schedule, in March, air traffic controllers said they needed more time to train. Late Wednesday, airport officials said they had been told by the government to postpone the opening by one day, to Saturday.

Bangalore has company in its misery. Attempts to revamp roads and ports have run into chaos all over India, not least because the actual growth of this bustling nation of more than a billion people consistently outstrips even the most perspicacious planner’s vision for it.

Traffic was backed up the day a new highway toll plaza linking New Delhi to its new satellite boomtown, Gurgaon, opened this year because planners far underestimated growth in traffic.

A high-speed bus route in the heart of Delhi was lambasted recently for pinching into car lanes, and no one, including the cows, seemed quite sure of which lane to use anyway. Several other major projects are behind schedule and mired in graft, including a new national highway.

The hullabaloo over the new airport is only the latest parable of India’s growth. That tale begins with the government’s decision to sign a deal with a private consortium to build the airport, agreeing to close the old state-run one, and effectively giving the new one a monopoly.

Generous as it was to the developers, it apparently failed to account for the Indian zeal to fly. Air traffic in and out of Bangalore has more than doubled since construction began three years ago, compelling the developer to amend the design of the airport.

Built on 4,000 acres and modeled after the airport in Zurich, whose developers are working on this project, the new airport now promises to accommodate 11 million passengers in its first year.

Still, most road and rail links that the government had promised to build to the airport have been delayed or scrapped, in part because lawsuits over acquiring the land and in part because they involve 32 government agencies.

Adding to the confusion, the state has been in the grip of political squabbling for many months.

Today, with air traffic likely to keep growing, an influential civic lobby is pushing for both airports to operate. Bangalore City Connect, a private industry-financed group that advocates for better urban infrastructure, said failing to plan for future growth would only add to Bangalore’s woes.

Albert Brunner, chief executive of the new airport, declined to comment on the appeal to keep the old one open, except to point out that the new one has plenty of room to grow. “It is our goal to always provide an infrastructure which is sufficient for or even ahead of the demand,” he said in an e-mail message.

The government official responsible for transportation to the airport said “future-proofing” had been complicated by the city’s “unforeseen” growth.

“We have been developing infrastructure all along,” argued V. P. Baligar, principal secretary for commerce and industries for Karnataka state, of which Bangalore is the capital. “The growth of the population has been faster.”

One lawsuit holding up the expressway project concerns D. M. Dwarkanath, a retired executive of a state-owned company. He risks losing his small bungalow to make way for the route. A hospice for children with AIDS is also threatened.

Such cases have sown deep resentment among many people here, who wonder: Why do people have to make way for India’s frequent-flying classes, which are still relatively small?

“It is only for the rich people,” Mr. Dwarkanath said fuming. “They don’t have patience. They want to rush to the airplane. They want to sweep everyone out of the way. Why should we live? Sweep us into the sea!”

They further contend that the path of the proposed expressway has been amended to spare the properties of politically connected people, a charge Mr. Baligar denies. He says the national highway authority will decide who must make way for the highway.

While the lawsuits crawl through the courts and bureaucrats pass files from one agency to the next, patience wears thin on Victoria Road in Bangalore. On a recent weekday morning, laborers carried stones on their heads, repairing a storm drain and backing up the morning traffic along two narrow lanes.

M. N. Badrinath, a salesman who spends three to four hours a day on the road, was skeptical. By the time repairs on this road are finished, he surmised, there will be even more cars. “The promises are like castles in the air,” he said, as he tried to sneak through a police line and into the traffic. “Are they planning for the future or for the present?”

An auto-rickshaw driver, Chand Pasha, said as he waited for a green signal: “My life is in traffic. It cannot get more miserable than this.” The misery of Bangalore’s roads has brought an unexpected boon to G. R. Gopinath, whose low-cost airline, Deccan, expanded the ranks of India’s fliers.

Mr. Gopinath is in favor of keeping the old airport open. Even so, starting Saturday he will offer a helicopter shuttle for commuters. It will cost about $100 and take 10 minutes.

Source : The New York Times

The government has finally set the opening for the new Bengaluru International Airport (BIA) for the night of May 23rd, early morning of May 24th, 2008.

Taking a cue from other statutory bodies like the Airports Authority of India (AAI), and Central Industrial Security Force (CISF), the Indian Customs authorities have demanded payment for their services rendered at the private operated airports like Bengaluru International Airport (BIA) and Rajiv Gandhi International Airport (RGIA).

Up till now, while AAI and CISF used to be paid for services like air traffic control and security services, even at AAI operated airports, Customs and Immigration were seen as a sovereign function, and no airport operator had to pay for it. But then, all airports in the country had been developed and/or operated by the state-owned AAI.

As per a news story by DNA of Sify, "The Central Board of Excise and Customs (CBEC) is seeking payment of salaries for its staff to be deployed at the new airport as well as expenses on fittings and fixtures, housing and transport for these people. As per existing policy, no airport operator is permitted to conduct certain operations (including security of the airport, customs and immigration) on its own so it has no choice but to approach the designated central agency for the purpose."

This demand poses an additional cost for both GMR and BIAL, the promoters of RGIA and BIA respective, and puts the Ministry of Civil Aviation in an embarrassing position. While the ministry has lodged a strong protest with the Finance Ministry, the operators at RGIA, are paying the demand "under protest". When BIA opens up, BIAL will also have no choice but to accept and pay.

I am in favour of this approach. For too long, we in India, have been used to getting services from the Government "gratis". We need to move to a lower tax regime, with a "payment for services", even for Governmental services. Customs have the right to demand their costs be re-imbursed, however, then, the airport operator should also be given the ability, to demand responsibility on the Customs authorities to follow rules of commerce and deliver the required services for payment received.

The rupee should cut both ways.

Part of this story was sourced from Sify.com and DNA Money

The Civil Aviation ministry today has requested BIAL the promoters of the new Bengaluru International Airport (BIA) to delay the launch of the airport to end May.

Most likely it will be May 29, 2008.

I offer my sincerest sympathies to the entire team at BIAL and its concessionaires. They have put in hard work to bring the project to fruition, and their efforts are getting compromised by the politics of elections, and the need of the Government to have a public display of their "achievements".

I also understand that the meeting was very positive on another topic of great interest to me. The continuation of operations at the existing HAL airport in parallel with BIA.

The meeting explored many options, and I was told by sources that the BIAL representatives came to the meeting with a positive attitude.

I have explained in my previous article the merits of keeping HAL airport open, along with the benefits for BIAL as a company.

There is another meeting scheduled for May 12, and I hope BIAL continues this positive attitude and accepts a deal that will keep all sides happy.