05. March 2007


Date: 05. Mar. 2007
Following is the statement made by Minister for Civil Aviation, Shri Praful Patel (independent charge).
"I rise to make an announcement on an issue of significance importance for the civil aviation sector in the country.
The two national carriers Air India Ltd. and Indian Airlines Ltd. share the proud legacy of being the pioneers of civil aviation in the country. However, in the past decade, their market position has been adversely affected due to intense competition and their inability to induct new fleet. Further, there has been a growing tendency of consolidation and merger in the civil aviation sector, which enables the airlines to achieve synergies and reduce costs. This august House is aware that our Government has already approved the induction of 68 new aircraft by Air India and 43 new aircraft by Indian Airlines. I am, happy to announce that Government has decided to merge the two airlines into a new company, which would further strengthen the public sector airlines. It is estimated that this decision would result in net benefit of Rs. 600 crores at the end of third year of merger.
We expect to put in place an airline which would be comparable to any other major airline, at lest in this region. The merger of the two airlines would be completed in a phased manner over next two years. The technical and procedural formalities for merging the two airlines would begin immediately and one company with one name, one brand, one logo, one code and single financials is expected to be in place within the coming 16 weeks. This new airlines, with about 112 aircraft, with both international and domestic footprint would set fresh benchmarks for efficiency and reliability; thus benefiting the civil aviation sector in the country, specially the traveling public.
While taking this decision, employee interests have been foremost in our mind. The Government is committed to ensure that all legitimate employee interests, including their current compensation, status etc. are protected. There will be no retrenchment and all employees will continue in the merged company. Besides, to keep the exercise as smooth as possible, the integration of manpower would be completed in a phased manner, on the basis of transparent and objective criteria. A well-defined Grievance Redressal Machinery will also be put in place.
It is our objective to create a world class airline, in the public sector, in close co-operation with all its employees."
Source: http://www.equitybulls.com


Date: 05. Mar. 2007
The merged entity will find it difficult to dominate Indian skies.
Even as the government is aiming at creating an airline behemoth to take on Asian tigers such as Singapore Airlines and Thai Airways, the merged Air-India and Indian Airlines entity will not dominate even the Indian skies.
India's private sector carriers have already become a force to reckon with and could gain in clout if allowed to fly international routes.
The total fleet of the unified entity constitutes 30 per cent of the total number of aircraft owned by Indian carriers. While the combined turnover of the merged entity is over 50 per cent of the Indian carriers’ turnover, it accounts for only 26 per cent of passengers.
The combined revenue of Air India and Indian Airlines is around Rs 16,000 crore, while they flew 11.7 million passengers in the last financial year.
The merged entity will, however, have a larger share of airport infrastructure. The entity will control over 70 per cent of the real estate at airports (such as parking bays, hangars and maintenance slots) in Mumbai and Delhi.
According to current statistics, the entity will control 25 per cent share in parking bays at the two metro airports, Delhi and Mumbai and will also own over 60 per cent of engineering services centres in the country.
"Passengers carried are less when one compares with major airlines in South East Asia," industry analysts said.
Singapore Airlines handles over 17 million passengers with just 90 planes, while Thai Air ferries 17.9 million with 85 planes. The total fleet size of Air-India and Indian Airlines is 122.
"The merger cannot be viewed in the context of mere numbers. The actual benefit will come from the synergies followed by a cost reduction," an Air India official said.
Take an example. Air-India and Indian Airlines operate over 10 flights a day to Singapore with an average load factor of 55 to 60 per cent.
"Post-merger, this could be curtailed to 5 flights with an 85 per cent load factor. Meanwhile, the merged entity can deploy additional capacity elsewhere to increase its network," the official added.
"The carriers can also cut short their human resources at overseas and domestic airports," added a government official.
Source: http://www.business-standard.com


Date: 05. Mar. 2007
Kingfisher Airlines, India’s fastest growing private carrier and the first airline in India to offer a premium first class service on domestic routes, announced the launch of its direct flights to Agatti from Kochi and stop-over flights from most major cities in India. This makes Kingfisher Airlines, the only private airline from India to launch a service to this destination.
Guests who arrived on the maiden flight of Kingfisher Airlines from Agatti were treated to a cultural extravaganza comprising a traditional welcome ceremony followed by a dance performance to delight the guests and the others present at the airport. With the launch of this new route, Kingfisher Airlines will be operating 158 flights across 29 cities.
Commenting on the launch of this new route, Dr. Vijay Mallya, Chairman and CEO, Kingfisher Airlines Limited said, “Kingfisher Airlines has redefined the experience of flying and is regarded as an airline that sets new benchmarks in service excellence for the industry. The addition of this new route is part of Kingfisher Airlines’ overarching game plan to rapidly expand the network by providing connectivity between important destinations which have a huge potential for growth in air traffic, given the overall growth in passenger traffic in domestic aviation.”
The Gateway to Lakshadweep, Agatti and its satellite islands of Bangaram, Tinnakkara and Parali present a breathtaking spectacle of sparkling coral reefs, turquoise blue lagoons, silvery beaches and lush green coconut palms. Indian air travelers can now enjoy the award-winning Kingfisher Airlines experience to this natural paradise on earth.
About Kingfisher Airlines
Kingfisher Airlines is India's first and only private airline to receive the prestigious, 'Best New Airline of the Year' award in the Asia-Pacific and Middle East region from Centre for Asia Pacific Aviation (CAPA). Kingfisher Airlines has also been voted as the 3rd Most Successful Brand Launch of the Year 2005, in the annual Brand Derby Survey conducted by India's leading business daily-Business Standard. In another Survey conducted by agencyfaqs.com, Kingfisher Airlines was voted as the 8th Buzziest Brand of 2006 amongst 2000 leading national and international brands. Kingfisher Airlines has also bagged the "Service Excellence for a New Airline" award from Skytrax, a UK based specialist global air transport advisor.
Another addition to the list of laurels is the "Best New Domestic Airline for Excellent Services and Cuisine" award from Pacific Area Travel Writers Association (PATWA). In a survey conducted by IMB for Times of India, 46% of the participants voted Kingfisher Airlines 'The Best Airline" and "India's Favourite Carrier". Kingfisher Airlines has also won the “Brand Leadership Award” in the service and hospitality segment against several acclaimed hotels, leading banks and other airlines. Lastly Kingfisher Airlines won the Economic Times Avaya Award for Excellence in “Customer Responsiveness” for 2006. The Award is highly acclaimed and is presented by India’s largest selling Economic daily, “Economic Times. For more information on Kingfisher Airlines log on to www.flykingfisher.com. Fly the Good Times with Kingfisher Airlines.
Source: http://www.businesswireindia.com