19. January 2007


Date: 19 Jan. 2007
KINGFISHER Airlines, promoted by the UB group, has signed contracts to acquire 10 A-320 aircraft on firm order with options to buy another 20 until 2008 at a cost of up to $1.8 billion or Rs 8,100 crore. Besides these 30 aircraft, the airline will lease four A-320 aircraft.
According to the airline's earlier plans, it was to buy four A-320 aircraft with 10 options.
Under the revised plans, it has signed the purchase agreement for four A320s and exercised six options, making a total of 10 firm orders, with options for a further 20 new aircraft.
According to the Chairman of Kingfisher Airlines, Mr Vijay Mallya, the airline will begin operations in April on receiving the four A-320s to be leased from Debis Air Finance based in the Netherlands. The first four aircraft to be bought by the company will be received by the end of 2005, he said. The paid-up capital of the airline currently stands at Rs 60 crore, as against the Government requirement of Rs 30 crore for commercial airline companies. Mr Mallya said that the paid-up capital would be hiked to Rs 160 crore in January 2005, to meet the operating expenses for the first year. The increase will be financed through internal funds of United Breweries Holdings Ltd, the parent company of the airline.
Mr Mallya told presspersons here on Saturday that the company would explore several options to finance its operations beyond the first year.
The Chief Financial Officer, Mr Ravi Nedungadi, said the airline hoped to break even in the first year of operations. However, this would depend on its passenger load factor.
Dr Mallya also announced the appointment of Mr Alex Wilcox as President and Chief Operating Officer of Kingfisher Airlines. Mr Wilcox was earlier with JetBlue, a US-based carrier. The Chief Commercial Officer, Airbus, Mr John Leahy, who was also present at the press conference, said Kingfisher, with its fleet of new A-320 aircraft, would be one of the youngest airlines across the world.
Source: http://www.thehindubusinessline.com


Date: 19 Jan. 2007
Low-cost carriers are out to strengthen their senior management bandwidth. The Bangalore-based Air Deccan is close to appointing a leading consultancy firm to advise it on restructuring the organisational structure, while it scouts for senior management professionals with domain expertise in finance, marketing, taxation, banking and insurance.
The low-cost carrier has just appointed Manab Bose, an ex-Tata group hand, as HR head, while bringing in Reinhard Wilm from GoAir as head of flight training. Over the next one year, Air Deccan would like to have in place a team of 35-40 professionals in senior and middle management positions, at the senior vice-president and vice-president levels.
“Some degree of restructuring of the organisation would facilitate faster top-level decision-making,” said Air Deccan finance director Mohan Kumar. The top management also feels the need for creating a middle-management-level hierarchy, in view of the rapid expansion of operations that the airline has gone through over the past one year.
Air Deccan is not the only low-cost carrier looking for top level professionals. The Delhi-based SpiceJet wants to hire a CFO in the current calendar year to man its expanding operations, while Jeh Wadia’s Go Air may see some new faces at the top, once it decides to ramp up operations, by the year end. The latest low-cost start-up, IndiGo, already has a dozen-odd professionals in its senior management team, with at least two of them being expats. It would add station managers to any new destinations it flies into this year.
HR industry professionals note that it is important for fledgling low-cost carriers to move from the start-up phase when management decisions are concentrated on a handful of top-level executives — generally promoters — and move towards a decentralised structure of decision-making as they scale up operations. Aviation industry analysts feel that Indian low-cost carriers need to hire more expat professionals for managing their airlines.
“Indian players need not re-invent the wheel as to how to run the low-cost business. Having expat professionals in key operational areas may help them avoid the mistakes that low-cost carriers made globally,” feels the CEO of a low-cost carrier.
Source: http://economictimes.indiatimes.com


Date: 19 Jan. 2007
Air India is foraying into freighter operations in big way. The airline is set to launch its first freighter service with the two A310 aircraft in June-July this year. This freighter service will have Bangalore on its radar along with Mumbai and Chennai.
Air India is also looking at converting its eight A310 aircraft and five Boeing 737-200 into freighter aircraft in the near future. The airline is planning to lease one or two Boeing 747-400 aircraft for cargo operations as well.
"This is the first step towards becoming a serious cargo player in India. As we induct new passenger aircraft into our fleet we plan to convert older aircraft for freighter services," said V Thulasidas, CMD, Air India. With this cargo operation Air India will become the first carrier in India to have its own dedicated freighter service.
Mr Thulasidas was in Bangalore on Friday to lay the foundation stone for cargo handling facility, which is being developed jointly by Air India and Singapore Airport Terminal Services Ltd (SATS) at the new Bangalore International Airport (BIAL).
With the two Airbus A310 aircraft Air India will launch freighter services to Frankfurt, Paris and Shanghai in June-July this year. The airline will send the two old passenger A310 aircraft to Germany for conversions.
"With the Air India-Indian merger, which is likely to materialise in the beginning of next financial year, we could have an integrated cargo operations covering domestic and international sector," said Mr Thulasidas. Indian is also looking at launching its own freighter service this year. It could look at converting its Boeing 737-200 aircraft.
Air India has also constituted a group to study the financial viability and the timeframe for conversion of wide bodied aircraft like Boeing 737-300 into freighter aircraft. Meanwhile the carrier will induct one Boeing aircraft every month over four years from February onwards out of 68 aircraft ordered in December 2005.
The first aircraft arrived in the first week of December last year and three more will be inducted this month. This 68 aircraft ordered includes the 50 wide bodied Boeing aircraft.
Source: http://economictimes.indiatimes.com


Date: 19 Jan. 2007
State-run carrier Air India said on Friday a joint venture with Singapore Airport Terminal Services Ltd. will invest 800 million rupees to set up a cargo handling facility in Bangalore.
The facility, to be constructed by January 2008, will have the capacity to handle 150,000 tonnes of cargo, an Air India statement said.
It would also handle perishable and specialised cargo including courier and mail.
Air cargo is gaining importance in India with the entry of large retailers and rising demand for fresh food and vegetables.
Source: http://in.today.reuters.com