AAI Saves Around INR 515 Crore Annually From 6 Airports Leased Under PPP Model

Airports Authority of India (AAI) is saving around INR 515 crore annually in terms of running costs of six airports that have been on lease under the public-private partnership since 2018, according to the civil aviation ministry. Six airports — Mangaluru, Lucknow, Ahmedabad, Thiruvananthapuram, Jaipur and Guwahati — were leased out under the Public Private Partnership (PPP) in 2018.

At the present valuation, AAI has incurred an expenditure of around INR 2,767 crore at these six airports before handing over them to the PPP concessionaire. The cost included capital work in progress and a Regulated Asset Base (RAB) in aeronautical and non-aeronautical assets.

"As per the concession agreement of 6 PPP airports, the concessionaire has paid this amount in the form of an upfront fee. This amount is subject to the requisite reconciliation, true-up and final determination by Airports Economic Regulatory Authority of India (AERA) of the quantum of such investment," Minister of State for Civil Aviation V K Singh said in a written reply to Rajya Sabha on Monday, December 4.

In the reply, the minister also gave the break-up of airport-wise "running costs saved by AAI per annum". For Ahmedabad, the amount is INR 137.41 crore, Jaipur (INR 50.96 crore), Lucknow (INR 62.96 crore), Mangaluru (INR 53.29 crore), Thiruvananthapuram (INR 142.09 crore) and Guwahati (INR 67.88 crore). Besides, the minister provided details about the revenues earned by the six concessionaires since taking over these airports. For Ahmedabad, the revenue is INR 506 crore, Jaipur (INR 251 crore), Lucknow (INR 365 crore), Mangaluru (INR 118 crore), Thiruvananthapuram (INR 350 crore) and Guwahati (INR 248 crore).

Public-Private Partnership in Indian Airports

A Public-Private Partnership (PPP) is a partnership between the public sector and the private sector to deliver a project or a service traditionally provided by the public sector. The advantage of a PPP is that the management skills and financial acumen of private businesses could create better value for money for taxpayers when proper cooperative arrangements between the public and private sectors are used.

PPP can increase the quality, the efficiency and the competitiveness of public services. It can supplement limited public sector capacities and raise additional finance in an environment of budgetary restrictions. The best use of private sector operational efficiencies can increase quality to the public and the ability to speed up infrastructure development.

Concerning the airport infrastructure in India, the implementation of PPPs has been happening since the 1990s. Cochin International Airport was the first Airport built on the PPP model in 1994; over the years, the PPP model has visibly evolved.

Currently, 14 airports are operated by private operators under PPP. Out of them, only three airports — Cochin, Bangalore and Hyderabad — were profitable in FY 2022-23, as per data shared by the minister in a separate written reply.

Airports Under National Monetisation Pipeline

Meanwhile, 25 airports are proposed to be leased out during the period from 2022 to 2025 under the National Monetisation Pipeline (NMP), with expected proceeds of INR 10,782 crore.

Bhubaneshwar, Varanasi, Amritsar, Trichy, Indore, Raipur, Calicut, Coimbatore, Nagpur, Patna, Madurai, Surat, Ranchi and Jodhpur are among the airports. Others are Chennai, Vijayawada, Vadodara, Bhopal, Tirupati, Hubli, Imphal, Agartala, Udaipur, Dehradun and Rajahmundry.

"The value of proceeds from monetisation of airports is dependent upon many factors including transaction timing, market conditions, investor appetite, transaction terms etc," the minister said.

In another written reply, Singh said these airports are being leased for their better management, utilising private sector efficiency and investment.

SriLankan Airlines has introduced double daily flights between Colombo and Mumbai, multiplying the convenience for passengers travelling to and from India’s financial and entertainment capital. The new double daily service to Mumbai will not only give a 50% boost to SriLankan’s capacity on its Mumbai route but will also strengthen the airline’s already vast network in India.

Flights UL 142 and UL 144 will depart daily from Mumbai to Colombo at 3:10hrs and 20:45hrs, respectively. Flights UL 141 and UL 143 from Colombo to Mumbai will depart at 23:45hrs and 17:10hrs, respectively. Passengers travelling out of Mumbai on SriLankan Airlines will now have the advantage of more flight options to Colombo and convenient connections via Colombo to popular destinations in the Far East, Europe and Australia including Singapore, Kuala Lumpur, Bangkok, London, Frankfurt, Paris, Melbourne and Sydney. 

Dimuthu Tennakoon, Head of Worldwide Sales and Distribution of SriLankan Airlines, stated, “The Indian market has been incredibly important to SriLankan Airlines since the get-go, and with India fast becoming one of the world’s largest outbound travel markets, we are only happy to expand our operations in one of India’s most celebrated cities and make travel between Mumbai and Colombo extra seamless. Our frequency increase comes on the heels of Sri Lanka announcing free visas for Indian visitors and we hope that these positive developments will encourage more travellers from Mumbai to stop by Sri Lanka.”

India is the only country with nine cities featured in SriLankan Airlines’ network. This includes Delhi, Bangalore, Hyderabad, Kochi, Trivandrum, Chennai, Trichy and Madurai, and Mumbai, to which SriLankan operates close to 100 flights every week.

Given the geographic and cultural proximity of the two countries, most Indians are likely to find a welcoming familiarity in Sri Lanka not found elsewhere. SriLankan Airlines is the best bet for Indians who want to experience the best of both worlds onboard. Customers can savour mouthwatering Indian vegetarian and non-vegetarian cuisine while enjoying the warmth and friendliness that embody the essence of Sri Lanka and its national carrier. 

SriLankan Airlines Celebrates 7 Years in Madurai

SriLankan Airlines recently celebrated seven successful years of connecting the city of Madurai in Tamil Nadu with Colombo and beyond. As the only non-Indian carrier to navigate the city’s skies, SriLankan Airlines has stamped an indelible mark on the international travel landscape of Madurai, bridging distances and people between Madurai and Colombo, and in a broader sense between Tamil Nadu and Sri Lanka.

The airline has played a central role in ushering in a new convenience in foreign travel to the people of Madurai. SriLankan’s unprecedented direct service, which now entails flights every Monday, Wednesday, Friday, Saturday and Sunday between the two cities, was what prompted Indian Immigration Authorities to introduce the e-Visa facility to the Madurai Airport.

SriLankan Airlines’ convenient flight schedule to and from Madurai further unlocks a host of seamless connections via Colombo to key points across the Middle East, Europe, the Far East and Australia in the airline’s network. The airline’s flight connections are designed for convenience and benefit migrant workers, students, business travellers and leisure tourists flying internationally out of Madurai.

The airline additionally operates to Chennai and Trichy in Tamil Nadu and has plans to increase its weekly operations between the Southern Indian state and Colombo. SriLankan further operates in Mumbai, Delhi, Bangalore, Hyderabad, Kochi and Trivandrum in India. With close to 100 flights every week out of India, the airline remains one of the greatest international flight operators in India.

Air India has launched an environment-friendly automated aircraft interior washing and nearly dry cleaning system that will save around 75,000 litres of water per aircraft annually.

The device, 'Aerowash' has multiple modern features like a robotic micro-fibre brush drum for cleaning and uses a nearly waterless process that considerably enhances efficiency in functioning making it more sustainable. For each narrow-body aircraft, the 'Aerowash' can save up to 30,000 litres of water and up to 75,000 litres per wide-body aircraft annually.

With a fleet augmentation going on in full swing at Air India the total quantity of cleaning water likely to be saved in future is enormous and boosts its green drive.

"The modern system of cleaning reinforces our dedication to efficiency, sustainability, and pioneering advancements at par with industry best practices. The 'Aerowash' ensures not only better maintenance of our aircraft but will also contribute to a greener environment in sync with the Tata group's commitment towards more sustainable ways of doing business," said SK Dash, Chief Technical Officer, Air India.

He added that aircraft cleaning is a critical aspect of maintenance and relies on time-consuming, resource-intensive and manual engagement. However, automated cleaning is not only time-efficient and sustainable, but it also reduces aerodynamic drag caused due to the accumulation of dirt, dust or grime, ultimately reducing the aircraft’s weight. This decreases the aircraft’s weight and leads to long-term fuel efficiency improvements and a reduced carbon footprint.

This, in turn, results in enhanced fuel efficiency in the long run while bringing down carbon footprint, safeguards against structural damage, prevents corrosion, and results in extending the lifespan of the aircraft, Dash added.

The superior quality of cleaning will not only enhance the appearance of the aircraft but also ensure a better cleaning by covering even critical areas of the aircraft like the crown, elevator or rudder, the official said.

Benefits of AeroWash

Air India SATS (AISATS), a leading airport services management company, has introduced India's first Robotic Dry Wash Service for aircraft exterior finish. AISATS has launched this cleaning technique - 'AeroWash' in collaboration with AeroTech Support Services Pvt. Ltd. a globally renowned name in implementing sustainable aviation solutions. This milestone signifies AISATS' commitment to embracing innovative technologies and sustainable practices that contribute towards the development of a sustainable aviation future. The AeroWash system harnesses advanced robotic technology to offer mechanised and efficient exterior cleaning for aircraft. With its wireless remote control operation and lightweight, flexible brush, AeroWash ensures superior cleaning results while maintaining the utmost safety for the aircraft and operators.

With the introduction of AeroWash, AISATS aims to provide significant cost savings for airlines while aligning with India's vision of sustainability. The advanced cleaning capabilities not only contribute to reduced aerodynamic drag but also result in increased fuel savings and a decreased carbon footprint.

Air France-KLM and private equity firm Apollo Global Management have successfully completed a significant transaction, securing EUR 1.5 billion (USD 1.63 billion) in financing for a newly established operating affiliate.

This dedicated affiliate will house the trademark and various commercial partner contracts associated with the joint loyalty program, Flying Blue, of Air France and KLM Royal Dutch Airlines. The financing, structured as quasi-equity, aims to strengthen the group's financial position and restore its International Financial Reporting Standards (IFRS) equity to positive levels by year-end.

Background

The transaction was formally announced on November 30, following the signing of a definitive agreement between the parties on October 26. The funding talks had initially been disclosed in late July, highlighting the strategic move to create a subsidiary specifically focused on managing the Flying Blue loyalty program.

Financial Structure

The EUR 1.5 billion financing is classified as equity under International Financial Reporting Standards. Apollo Global Management will subscribe to perpetual bonds issued by the new affiliate, featuring an interest rate of 6.4% for the initial four years. Importantly, Air France-KLM retains the right to redeem these bonds after the specified period.

Impact on Flying Blue Members

The official statement emphasizes that the agreed-upon structure will have no material impact on Flying Blue members. Air France-KLM will continue to manage and operate the loyalty program, and both Air France and KLM will retain full control of the Flying Blue customer database. This ensures continuity and stability for the program's members.

Operational Aspects

Crucially, the financing arrangement is designed to have no adverse effects on the social aspects of Air France, KLM, or Air France-KLM employee contracts. This strategic move aligns with the group's commitment to maintaining operational integrity while securing essential funding.

Apollo's Commitment

In July, prior to the disclosure of the funding talks, Apollo Global Management had confirmed a commitment of EUR 1 billion (USD 1.1 billion) from "Apollo funds, affiliates, and clients." This commitment was part of a broader capital injection into Air France-KLM via the Maintenance, Repair, and Overhaul (MRO) unit, Air France Industries-KLM Engineering & Maintenance.

Conclusion

The successful completion of the EUR 1.5 billion financing transaction marks a crucial step for Air France-KLM in fortifying its financial position and achieving positive IFRS equity by the end of the year.

The dedicated affiliate for the Flying Blue loyalty program ensures a focused approach to managing this critical aspect of the group's operations. The strategic partnership with Apollo Global Management demonstrates a commitment to securing essential funding and navigating the challenges faced by the aviation industry in the current economic landscape.

With Inputs from ch-aviation

In a significant development in the Thai aviation sector, Thai Smile, the subsidiary of Thai Airways International, is set to shut down by December 31, 2023. Thai Airways CEO Chai Eamsiri confirmed the news, citing a strategic move to streamline operations and enhance service efficiency within the industry.

Background

Thai Smile, which operated for eleven years, will see its 'WE' coded flights and brand come to an end. The parent company, Thai Airways International, is set to take over the remaining routes not already absorbed, with the entire transition process expected to conclude by January 31, 2024.

Transition Timeline

The transition process involves the transfer of assets and aircraft from Thai Smile to Thai Airways. The original fleet of twenty A320-200s, all leased or sub-leased from Thai Airways, has been progressively integrated back into the parent company's fleet. As of now, the fleet has shrunk to less than ten aircraft.

Reservation and Service Transfer

Existing reservations with Thai Smile will be seamlessly transferred to Thai Airways, starting on December 16, 2023. The Thai Smile website will remain active until December 15, and the call center will continue to operate until December 31, after which callers will be directed to the Thai Airways desk.

Route Integration

Thai Smile has been gradually transferring its routes to Thai Airways. Notable routes, including Bangkok Suvarnabhumi - Phuket, Bangkok Suvarnabhumi - Chiang Mai, Bangkok Suvarnabhumi - Gaya, and others, were integrated on December 1. Further routes, such as Bangkok Suvarnabhumi - Krabi and Bangkok Suvarnabhumi - Siem Reap, along with all remaining Thai Smile services, will be fully operated by Thai Airways starting January 1, 2024.

Strategic Move for Operational Efficiency

CEO Chai Eamsiri emphasized that the cessation of Thai Smile's operations is a strategic move aimed at streamlining operations and enhancing service efficiency within the Thai aviation sector. This decision comes as Thai Airways, having navigated through the challenges posed by the pandemic and undergoing a court-supervised rehabilitation and restructuring process, looks to exit the process on solid financial footing. The company aims to relist on the Thai Stock Exchange in the following year.

Conclusion

The discontinuation of Thai Smile marks the end of an era for the low-cost carrier. As Thai Airways takes over its remaining operations and assets, the move is expected to contribute to a more streamlined and efficient aviation sector in Thailand. Thai Airways, anticipating a successful exit from its rehabilitation process, looks forward to a renewed financial standing and a return to the stock exchange in the coming years.

With Inputs from ch-aviation

Air India, on Monday, December 4, 2023, announced a strategic collaboration with Hirsch Bedner Associates (HBA), a renowned hospitality interior design firm, to revamp its lounges at Terminal 3, Indira Gandhi International Airport in New Delhi, and Terminal 4 of JFK Airport in New York.

Elevating the Customer Experience

In a statement released on the same day, Air India highlighted this move as a significant milestone in the airline's ongoing transformation plan, aimed at enhancing the customer experience at every touchpoint of their journey. The refurbishment project, set to commence shortly, promises to deliver an elevated and more luxurious lounge experience for Air India passengers.

The Chosen Partner - Hirsch Bedner Associates

HBA, the chosen design firm for this project, boasts an impressive portfolio, having undertaken projects for global institutions such as the Taj group, Marriott, InterContinental, Hilton, and Singapore Airlines. Their expertise in crafting sophisticated and immersive interiors aligns seamlessly with Air India's vision for providing a world-class experience to its passengers.

A Commitment to Excellence

Rajesh Dogra, Chief Customer Experience Officer at Air India, expressed the airline's commitment to offering the highest standards of service to its guests as part of its transformation journey. He emphasized that the association with HBA is a crucial step towards extending a warm and welcoming lounge experience that embodies the essence of Air India's commitment to excellence.

Strengthening Customer Proposition

Dogra pointed out that, over the past year, Air India has taken several initiatives to enhance customer experience across various touchpoints, including digital channels, airport services, inflight experiences, and contact centers. The redesigned lounges, according to Dogra, will further strengthen Air India's customer proposition.

Future Expansion Plans

While the refurbishment project is starting with the lounges at Terminal 3 in New Delhi and Terminal 4 in New York, Air India is concurrently working on expanding its lounge network to other major airports in India and abroad. This expansion aligns with the airline's broader strategy to provide an enhanced and consistent experience to passengers across its network.

Conclusion

In summary, Air India's partnership with Hirsch Bedner Associates signifies a commitment to delivering a premium and refined experience to its passengers. The forthcoming lounge refurbishments are poised to set a new standard for luxury and comfort, reflecting Air India's dedication to staying at the forefront of the aviation industry's customer-centric transformation.