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Monthly Newsletter December, 2012

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Monthly Newsletter December, 2012 ASSOCIATION OF PRIVATE AIRPORT OPERATORS Monthly Newsletter December, 2012 Members: CONTENTS 1. Aviation Sector ............................................................................................. 3 2. Airports 2.1 Bangalore International Airport Limited ............................................... 11 2.2 Cochin International Airport Limited .................................................... 11 2.3 Delhi International Airport Limited………………………………………………………11 2.4 GMR Hyderabad International Airport Limited…………………………………….12 2.5 Mumbai International Airport Limited…………………………………………………13 3. Airlines 3.1 Air India………………………………………………………………………………………………14 3.2 Kingfisher Airlines……………………………………………………………………………….15 3.3 SpiceJet………………………………………………………………………………………………16 3.4 Jet Airways……………………………………………………………………………………….…17 3.5 IndiGo…………………………………………………………………………………………….…..18 3.6 GoAir………………………………………………………………………………………………….18 3.7 Air Mantra………………………………………………………………………………………….18 3.8 International Airlines………………………………………………………………………….18 4. Cargo ……………..………………………………………………………………………………………..20 5. AERA Appellate Tribunal …………………….…………………………………………………..21 6. Traffic…….…………………………………………………………………………………………………22 7. Source……………………………………………………………………………………………………….24 Page 1 of 24 ABBREVIATIONS AAI Airports Authority of India ADF Airport Development Fee AERA Airports Economic Regulatory Authority of India ANS Air Navigation System ATC Air Traffic Control ATF Aviation Turbine Fuel BCAS Bureau of Civil Aviation Security BIAL Bangalore International Airport Limited CAPA Centre for Asia Pacific Aviation CCI Competition Commission of India CIAL Cochin International Airport Limited CISF Central Industrial Security Force CSIA Chhatrapati Shivaji International Airport, Mumbai DGCA Directorate General of Civil Aviation DIAL Delhi International Airport Limited F&B Food and Beverage FIPB Foreign Investment Promotion Board GHIAL GMR Hyderabad International Airport Limited IATA International Air Transport Association ICAO International Civil Aviation Organisation IGIA Indira Gandhi International Airport, New Delhi MIAL Mumbai International Airport Limited MoCA Ministry of Civil Aviation MoU Memorandum of Understanding OMDA Operation, Management and Development Agreement PLF Passenger Load Factor PNGRB Petroleum and Natural Gas Regulatory Board PPP Public Private Partnership RGIA Rajiv Gandhi International Airport, Hyderabad UDF User Development Fee VAT Value Added Tax Page 2 of 24 1. AVIATION SECTOR 1. West Bengal’s first private airport is expected to be operational by 15th April 2013. The airport is being developed near Durgapur by Bengal Aerotropolis Pvt. Ltd. The new airport will take on competition with cheaper landing charges, airport usage fees, rentals and night parking facilities. Apart from the Rs 600 crore domestic airport, with peak hour capacity of nearly 450 passengers, Bengal Aerotropolis Pvt. Ltd. is also developing an airport city (aerotropolis) on an 1800 acre plot. 2. DGCA is in the process of preparing a ‘Hazard Log Template’ which DGCA says will become a sort of “bible” for air safety in the years to come. An internal circular was send to all concerned parties i.e. airlines, aircraft parts manufacturers, oil and insurance companies, to prepare a report that lists out hazards, apart from preparing an analysis in order to create an effective safety manual. 3. MoCA is considering divesting Air India Ltd’s engineering subsidiary in 2013 after hiring a foreign executive to head the engineering business as its Chief Executive. The move is to improve the efficiency of the business and win potentially large local contracts worth several hundred crore of rupees. 4. Supreme Court on 3rd December questioned the levy of several miscellaneous charges on fliers and took a suo moto cognizance of imposition of UDF and conveyance charges by airlines, setting the ground for a massive hike in airfares for those flying in and out of the IGIA. The apex court issued notice to the Centre and DIAL and sought a categorical explanation as to why these charges were burdened on the travelers instead of airline companies. 5. Minister of Civil Aviation Shri Ajit Singh met Petroleum Minister on 4th December and convinced him to bring ATF under the purview of PNGRB. Bringing ATF under PNGRB will make the pricing of jet fuel transparent and also check cartelization by oil companies. The cost of ATF across the country is likely to come down by up to 25% which will be at par with airports such as Bangkok, Hong Kong and Singapore where it is 20 to 25% lower. Both the Ministers will meet Finance Minister to convince him to bring ATF under capital goods category. Petroleum Minister also agreed to the request for Rs 5,000 per kilolitre discount for Air India on a condition that Air Idia will not default on payments any further and also clear all the dues to oil companies by April 2013. 6. Minister of State for Civil Aviation Shri K.C. Venugopal in a written reply to a question in Lok Sabha on 5th December informed that MoCA has engaged a team of experts from ICAO to carry out a detailed study of the existing security system at the airports to strengthen the Civil Aviation Security in the country and suggest measures to improve the same. The ICAO study report, which has been accepted by the Government, has suggested establishing a dedicated Aviation Security Force under the command and control of the MoCA which is supposed to be completely integrated with the aviation industry, in line with the practices across the world. To pursue the matter further, a Sub- group was constituted by the MoCA to examine the recommendations of ICAO study report on creation of a dedicated specialized Aviation Security Force. The Sub-group has also recommended constitution of a dedicated, specialized Aviation Security Force under the command and control of MoCA. Further, necessary action has been initiated to approach Cabinet Committee on Security for seeking its approval. Page 3 of 24 7. Minister of State for Civil Aviation Shri K.C. Venugopal in a written reply to a question in Lok Sabha on 5th December informed that airfares applicable for domestic passengers are determined by the market forces and are not fixed by the Government. Airfares are dependent upon ATF prices, Airport Development Charges, Passenger Services fee, Foreign exchange rates, Service Tax etc. Fluctuations in any of these components affect the airfares. Scheduled airlines offer different fare buckets for each flight and the airfares offered by the airlines in lower bucket are affordable. The airfares increase with the increase in demand for seat, as the lower fare buckets get sold out fast. Random monitoring of domestic airfares revealed that the airfares are remaining within the fare band made available by the scheduled airlines on their respective websites. With a view to maintain transparency in tariff publication, Scheduled domestic airlines have been asked to display established tariff route-wise and fare category-wise on monthly basis and also to notify noticeable changes to DGCA within 24 hrs. of effecting such a change. The intention behind the above directions is to keep the passengers informed of pricing pattern of airlines. Further, DGCA also monitors tariff on specific sectors on regular basis. 8. MoCA is working on a proposal to cap the lowest and highest ticket prices for a given period which the airline would not be allowed to cross. 9. Parliamentary Penal has sought a probe against Indian Carriers charging unreasonable air fares and recommended that any increase in ticket prices should be approved by DGCA in the future. 10. West Bengal Government is exploring opportunities to introduce helicopter services to Sunderbans and the hills. 11. AAI and Ministry of Transport and Civil Aviation, Islamic Republic of Afghanistan has signed an MoU on 5th December under which AAI will provide training to Afghanistan Aviation Personnel on airport management, fire service and communication and navigation services at different training institutes of AAI. 12. IATA in its Airline Industry Forecast 2012-2016 has mentioned that only Kazakhstan, India and China would experience double-digit growth in domestic passenger traffic during the period, recording 22.5, 13.1 and 10.1 per cent growth respectively, adding a total of 49.3 million new passengers. By 2016, the five largest markets for domestic passengers would be the United States (710.2 million), China (415 million), Brazil (118.9 million), India (107.2 million) and Japan (93.2 million). Globally, the IATA industry traffic forecast showed that the airlines were expected to fly some 3.6 billion passengers in 2016, which is about 800 million more than the 2.8 billion carried by airlines in 2011. International freight volume will grow at 3% per annum to total 34.5 million in 2016. That is 4.8 million more tones of air cargo than the 29.6 million tones carried in 2011. India would be among five fastest growing international freight markets over the 2011-2016 period. The compound annual growth rate of the air cargo sector would be the highest for Sri Lanka at 8.7 per cent, followed by Vietnam (7.45), Brazil (6.3%), India (6.0%) and Egypt (5.9%). By 2016, the largest international freight markets will be United States (7.7 million tonnes), Germany (4.2 million tonnes), China (3.5 million tonnes), Hong Kong ( 3.2 million tonnes), Japan (2.9 million tonnes), UAE (2.5 million Page 4 of 24 tonnes), the Republic of Korea ( 1.9 million tonnes), UK (1.8 million tonnes), India (1.6 million tonnes),
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