Air Works to get 462 cr offer from Adani Group

Jinen Gada

05 Aug 2022

The Adani Group, which manages seven airports within the country, is trying to spend money on India’s largest impartial plane upkeep, restore and overhaul (MRO) organisation in a bid to boost its civil aviation portfolio.

The Adani Group is looking to invest in India’s largest independent aircraft maintenance, repair and overhaul (MRO) organisation. Adani Group has made a ?462 crore non-binding offer to acquire Air Works, one of India’s oldest aircraft maintenance and repair companies.

A team from Adani’s defence and aerospace division has been leading the discussions for the Air Works acquisition. One of the sources cited earlier said the due diligence was “progressing well”.

Adani To Purchase Stake In India's Biggest Aircraft Maintenance, Repair And Overhaul Firm.

Air Works was founded in 1951 by the family of Ravi Menon. The company has four major groups of shareholders-the Menon family, Punj Lloyd Aviation, GTI Capital and an employee welfare trust-which together own 100% of its shares.

Air Works holds certifications from aviation authorities of over 25 countries to maintain both narrow and wide-body aircraft at leading airports.

Having a pan-India presence across 19 international airports, Air Works Group is the largest provider of transit or line maintenance services to foreign passenger and cargo carriers operating in the country.

Line maintenance work includes changing tyres, checking aircraft lights for their functioning, topping up engine oil, and charging hydraulic accumulators, among others.

The Air Works Group is India’s largest independent aircraft maintenance, repair and overhaul (MRO) organisation. It has customers like IndiGo, Vistara and GoAir amongst other international airlines like Etihad, FlyDubai, Lufthansa, Turkish Atlantics and Virgin Atlantic.

Line maintenance work includes changing tyres, checking aircraft lights for their functioning, topping up engine oil, and charging hydraulic accumulators, among others.

The proposed take care of Air Works is according to the Adani Group’s plan to leverage options arising from the rising Indian civil aviation demand and the rising desire for MRO providers.

ALSO READ - Indian Navy receives sixth P-8I from Air Works

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IndiGo becomes the first airline in the world to introduce a three-point disembarkation procedure

Radhika Bansal

05 Aug 2022

IndiGo on Thursday, August 4 announced it would disembark passengers from three doors of the plane, allowing the flyers to quickly get off the aircraft. The airline is the first in the world to adopt the new three-point disembarkation procedure.

"The new three-point disembarkation process will be carried out from two forward and one rear exit ramp, making IndiGo the first airline in the world to use this process," the airline said in a statement.

Two ramps are being deployed on the front of the plane and another on the back in a bid to clear planes 5-7 minutes faster. This is also expected to help improve the efficiency as well as the on-time performance of the airline.

IndiGo CEO Ronojoy Dutta told reporters at the Delhi airport that the three-point disembarkation will allow the airline to save five-six minutes, leading to a quicker turnaround of planes.

"It generally takes 13-14 minutes to disembark an A321 aircraft with two-point disembarkation. With three-point disembarkation, it will take just seven-eight minutes to let all passengers get off the plane," he noted.

The usual turnaround time, which is the time the plan spends on the tarmac between landing and taking off again, is anywhere between 30-35 minutes for IndiGo at the moment.

“It brings us immense pride to be the first airline in the world to use a three-point system. At IndiGo, we constantly keep reinventing our internal standards to enable a hassle-free customer experience as well as contributing to operational efficiencies for all stakeholders including airport operators and ground handling companies.” Ronojoy Dutta, CEO, IndiGo

His comments came a day after the company reported its highest ever quarterly revenue for the three months ended June 30, boosted by a 145% increase in capacity and a load factor, representing the percentage of seats filled, of about 80%.

This new disembarkation procedure is being implemented on IndiGo’s A320 and A321 fleet for flights arriving at remote stands at Delhi, Mumbai, and Bengaluru airports to begin with, and will be progressively deployed across the network in the next 100 days.

IndiGo currently has 181 Airbus A-320 and 65 Airbus A-321 aircraft in the fleet.

“At IndiGo, we have always looked at newer ways to enhance our customer experience and make flying, as well as our ground operations, efficient and hassle-free. Adding a third ramp for disembarkation is a simple yet effective way to complete a smooth travel experience for our customers. We have always been known for setting new benchmarks in innovating travel and our 16th anniversary is the perfect occasion to make the experience a little sweeter for our customers – as they can get to work or meet their loved ones quicker.”Sanjeev Ramdas, Executive Vice President, IndiGo

The airline said that trials over the past 45 days have shown the turnaround time to disembark an Airbus A320 plane has fallen from an average of 13-14 to 7-8 minutes now.

IndiGo is India’s largest passenger airline with a market share of 56.9% as of June 2022. Since its inception in August 2006, it grew from a carrier with one plane to a fleet of 279 aircraft today.

IndiGo becomes the first airline in the world to introduce a three-point disembarkation procedure

IndiGo has a total destination count of 97 with 74 domestic destinations and 25 International. IndiGo celebrated its 16th anniversary on August 4.

Competition in India's aviation sector is heating up, with the launch of Akasa Air and the return of full-service carrier Jet Airways, though IndiGo's biggest rival SpiceJet Ltd is facing some turbulence after India's aviation regulator forced it to reduce its schedule by half.

ALSO READ - IndiGo reports net loss of INR 1,064 crore in Q1

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Indian Navy receives sixth P-8I from Air Works

Radhika Bansal

05 Aug 2022

Indian MRO and aviation services and solutions major - Air Works - has handed over the last of the six P-8I maritime patrol aircraft after completing Phase 32 maintenance checks to Boeing and the Indian Navy. The heavy maintenance of these aircraft was successfully completed at the Air Works facility at Hosur, Tamil Nadu.

Air Works and Boeing signed a strategic collaboration in 2021 for the MRO of two critical Boeing defence platforms in India - the P-8I operated by the Indian Navy (IN) and the VIP transport fleet (BBJ) operated by the Indian Air Force (IAF).

Indian Navy receives sixth P-8I from Air Works

ALSO READ - Boeing expands MRO capability for Indian Navy’s P8I fleet

Three Indian Navy Boeing P8Is are simultaneously undergoing heavy maintenance checks at the Hosur facility of Air Works, India’s largest aviation MRO, to demonstrate the growing capability to service these mission-critical platforms in India. 

“We are grateful to both Boeing and the Indian Navy for their trust in Air Works to deliver on such a unique and mission-critical project for the very first time in the country. Not only has every successful inspection increased our confidence of managing such intricate and specialized projects on behalf of our defense forces, but the fact that we have been able to value add with our ingenuity and decades-long experience to enhance the quality of maintenance of these premium assets, has particularly boosted our motivation and self-assurance. This is an incredibly proud moment for the everyone at Air Works, especially the P-8I project team - who have transformed their ardent passion into a brilliant outcome, and we look forward to expanding our collaboration horizon.One of the key learning of this project has been that aviation & aerospace OEMs must take a leaf from Boeing’s BIRDS hub initiative and partner with domestic MROs like Air Works, to successfully realize the Government’s Make-in-India program, to scale up local maintenance capabilities and ensure that more and more maintenance assignments – irrespective of their complexity or their nature - civil or defense - are undertaken within the country, for cost effectiveness and to create a strategic depth."D Anand Bhaskar, Managing Director & CEO, Air Works Group

Under this collaboration, three P-8Is had already undergone maintenance at Air Works and three more were simultaneously inducted earlier this year – which intensified the complexity of the entire project.

The partnership between Air Works and Boeing is well positioned to further strengthen, as the P-8I inspection programme expands in terms of both scale and scope.

“Ensuring mission-readiness for our customers and providing them seamless services and support on our platforms is imperative for Boeing. Having completed heavy maintenance checks for six P-8Is for the Indian Navy by our partner Air Works is testimony to our joint and long-standing commitment towards bolstering MRO capabilities in the country.We have always supported the development of indigenous aerospace and defense capabilities in India, and through the years, invested in partnerships within the Indian aerospace ecosystem in MRO, services and sustainment, as much as in manufacturing, R&D and innovation, and talent."Salil Gupte, President, Boeing India

The P-8I is an aircraft designed for long-range anti-submarine warfare (ASW), anti-surface warfare (ASuW), and intelligence, surveillance and reconnaissance (ISR) missions. It is built to deliver the highest levels of quality, reliability, and operability.

The P8I is the Indian Navy’s most capable surveillance and reconnaissance aircraft. The induction of the P8I fleet in 2013 is widely regarded as a game-changer for India’s maritime capabilities. Nine of these aircraft have been delivered and three more are in the pipeline. 

The P8I is the Indian Navy’s most capable surveillance and reconnaissance aircraft.

A true multi-mission aircraft, it is defined by a unique combination of state-of-the-art sensors, proven weapons systems, and a globally recognized platform. Its induction into the Indian Navy in 2013, is widely regarded as a game changer for India’s maritime capabilities.

Established in 1951, Air Works has a pan-India network across 27 cities and provides MRO support to Boeing 737 and Airbus 320 fleets besides the ATR 42/72 family. It is also an Authorized Service Centre (ASC) for Bell and Leonardo helicopters and undertakes modification and assembly of rotary-wing aircraft.  

Cover Image - Bangalore Aviation

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More flights on Birmingham-Amritsar route, Birmingham MP writes to Air India

Jinen Gada

04 Aug 2022

The demand to increase Air India’s flight frequency between Birmingham and Amritsar is gaining momentum as the demand for the route continues to grow. More than 10 lawmakers from the region have written to the airline to restore its pre-pandemic schedule between the two cities to boost trade and tourism ties between the UK and India.

The number of passengers travelling between Birmingham and Amritsar has always been high. Earlier, such passengers had no option but to travel from London, but this changed when Air India introduced twice-a-week non-stop flights between the two cities in 2018.

Birmingham has an enormous Punjabi and Sikh population.

The flights immediately became popular with impressive load factors, but like many popular routes, BHX-ATQ was dropped following the COVID pandemic, with flight reinstated last year but from the earlier six-week schedule, it became just once a week.

British Indian-origin MP Preet Kaur Gill is leading a campaign for more direct flights between Birmingham and Amritsar in India. Birmingham has a large Punjabi and Sikh population that benefits significantly from direct connections.

Demand for Birmingham-Amritsar flights remains high.

For example, in 2018, when Air India started direct service between the two destinations, it was met with much fanfare. But after COVID, Air India first suspended the flight and later resumed it on a lesser frequency. And now, Birmingham MP Preet Kaur Gill and 11 other MPs have written to the airline requesting it to restore the previous schedule to meet the high demand from the local population.

"While it was welcome that the Birmingham-Amritsar direct flight resumed last August as Covid travel restrictions relaxed, we are concerned that the regularity of flights have remained significantly scaled down. Currently, there is only one direct flight per week to Amritsar, Punjab from Birmingham International Airport, and we are keen to see that this is increased, as it has from London Heathrow Airport, in the coming months."Birmingham MP Preet Kaur Gill

Before writing to Air India, Gill had already communicated with Birmingham Airport and met with a positive response. The airport’s aviation director, Tom Screen attended a conference in Asia specifically to discuss route development with Indian Airlines.

Indian-origin British MP Preet Kaur Gill is spearheading a campaign for more direct flights between Birmingham and Amritsar in India.

Air India had plans to increase the frequency of flights from once a week to six but had issues with not getting enough spare parts for their Boeing 787 fleet, which means that a number of these aircraft are currently grounded.

Hopefully, under the new ownership and with Campbell Wilson taking charge of the airline, Air India will soon resolve its fleet issues and increase frequency to Birmingham.

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IndiGo reports net loss of INR 1,064 crore in Q1

Radhika Bansal

04 Aug 2022

IndiGo narrowed its quarterly net loss on year as air travel demand increased and offset soaring costs of fuel. India's biggest airline by market share posted a net loss of INR 1,064 crore in the April-June quarter compared to a loss of INR 3,174 crore a year earlier.

Its outgoing CEO Rono Dutta said the airline will continue to be in the red in July-September. But he expects it to return to profit in October-December.

IndiGo posted total revenue of INR 12,855 crore, a 375% increase on year. Its number of passengers rose 222%. But fuel costs for the quarter doubled to INR 5,990 crore.

IndiGo posted a net loss of INR 1,064 crore in the April-June quarter compared to a loss of INR 3,174 crore a year earlier.

IndiGo’s total income this Q1 was INR 13,018.8 crore, up 311% from INR 3,170.3 crore in the same quarter last year. However, total expenses also rose 122% from INR 6,344.4 crore in April-June 2021 to INR 14,083.1 crore this Q1.

IndiGo had a total cash balance of INR 19,069.4 crore comprising INR 8,303.7 crore of free cash and INR 10,765.7 million of restricted cash. The capitalised operating lease liability was INR 34,474 crore and the total debt (including capitalised operating lease liability) was INR 39,277.6 crore.

"Our revenue performance this quarter was impressive. We reported the highest ever revenue generated by the company and thereby produced profits at an operational level. However, cost pressures on fuel and foreign exchange prevented us from translating this strong revenue performance into net profitability. While our financial performance in the second quarter will be challenged by weak seasonality, the long-term revenue trend remains strong." Ronojoy Dutta, CEO, IndiGo

Capacity increased 145% YoY while passenger numbers climbed 221.9% for the quarter. Fuel prices rose 95.5% YoY. InterGlobe reported an EBITDAR of INR 716.90 crore with an EBITDAR margin of 5.6%. This is against a negative EBITDAR of INR 1360.20 crore with a negative EBITDAR margin of 45.2%.

India's domestic travel demand spurted in the April-June quarter shaking off the woes of the pandemic. A fresh spike in infections has, however, crimped demand to an extent.

ALSO READ - IndiGo reports loss of INR 1,682 crore due to a surge in aircraft fuel expenses in Q4

IndiGo’s total income this Q1 was INR 13,018.8 crore, up 311% from INR 3,170.3 crore in the same quarter last year.

In a post-earnings conference call with analysts, he said the lean travel demand in September would "drag down" the July-September quarter, but he expected a "perfect storm" of profitability in the third quarter. This would happen with passenger load factors inching up and yields rising. IndiGo will restore all salaries to pre-Covid levels by November.

ALSO READ - 55% of IndiGo domestic flights delayed due to crew calling in sick; DGCA seeks explanation

The airline's staff, including pilots, recently stayed away from work, protesting salaries. This led to considerable disruption in its flight schedules for at least one day. The airline industry in India is undergoing a churn.

The results come as IndiGo has seen a churn at the top, while reports of an exodus of its ground crew and technicians to other airlines have also been doing the rounds.

As of June 30, 2022, the airline had 281 aircraft in its fleet including 35 A320 CEOs, 146 A320 NEOs, 65 A321 NEOs and 35 ATRs

IndiGo expects a jump of about 70%-80% in capacity in available seats per kilometre in the current quarter from the same period a year earlier. Although demand has picked up, high fuel costs and inflation have emerged as big concerns for airlines.

As of June 30, 2022, the airline had 281 aircraft in its fleet including 35 A320 CEOs, 146 A320 NEOs, 65 A321 NEOs and 35 ATRs; a net increase of 6 aircraft during the quarter. It operated a peak of 1,667 daily flights during the quarter including non-scheduled flights.

During the quarter, the airline provided scheduled services to 73 domestic destinations and 20 international destinations with a technical dispatch reliability of 99.9% and an on-time performance of 85.5% at four key metros.

During the quarter, the airline provided scheduled services to 73 domestic destinations and 20 international destinations

Cash strapped carrier SpiceJet has faced the Indian regulator's mandated cap on its flights after a spate of safety incidents. It also received deregistration notices on its leased aircraft from lessors on alleged defaults. New airline Akasa has started selling tickets and will start flying soon.

Jet Airways under new owners is waiting to start, while the Tata group wants to build a big aviation entity with Air India, Vistara and AirAsia India. Dutta said he doesn't expect big disruptions in ticket pricing.

He said the airline has resumed operations to all international destinations barring China, Hong Kong and Myanmar. It plans to launch flights to Ras-al-Khaimah soon.

IndiGo CEO on the Indian airline industry

IndiGo’s outgoing CEO Ronojoy Dutta spoke about three major developments in the Indian airline industry at the moment — Tata’s mega plans for its four carriers, the shrinking of SpiceJet and Akasa taking to the skies.

“The competition is increasing, adding flights. But it’s quite small at this moment (Akasa). One of our major competitors has clearly reduced capacity a lot (SpiceJet) over the last year or two and that is helping us a lot. We do not see too much impact of the competition and if anything we see a healthy industry environment,” Dutta said in an earnings call on Wednesday. Ronojoy Dutta, CEO, IndiGo

Asked if full-service Air India revived by Tatas and Vistara will take back the corporate business class passengers IndiGo got after Jet’s collapse in 2019, Dutta said -

“We are not head-to-head competitors. They (AI and Vistara) are very focussed on long haul international, not short haul, with a business class product. That’s not a market we serve. Therefore their domestic strategy is tied to that (aiming to) fill their wide bodies. We are not in the same ballpark. We are in the domestic market, small town and frankly (our) metro-to-metro is one of our weaker segments as that has too much capacity. Corporate demand is back but metro-to-metro is relatively weaker than metro to non-metro and non-metro to non-metro. We really are separated by customer, destination and network segments. They will do great catering to international network and competing with Lufthansa, Qatar Airways. We are not."Ronojoy Dutta, CEO, IndiGo

When IndiGo goes medium-haul international once the Airbus A321 XLRS start coming in from mid-2024, it will be going to places like Tel Aviv, Milan and the far east. IndiGo international operations are also back to the pre-Covid level.

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Modernization of Air India to start soon by Tata Technologies

Jinen Gada

04 Aug 2022

Tata Technologies will work on modernising operations of Air India by digitizing its fleet and equipment data and introducing digital solutions for aircraft maintenance, as the Tata Group moves to revive the country’s oldest airline.

Tata Technologies Limited is a company in the Tata Group that provides services in engineering and design, product lifecycle management, manufacturing, product development, and IT service management to automotive and aerospace original equipment manufacturers and their suppliers. It is a subsidiary of Tata Motors.

Air India's load factor improves to 80% under the Tata group.

Tata Technologies is 74% owned by Tata Motors. It gets 75% of its revenue from the automotive segment.

Chairman, N Chandrasekaran said earlier, that the Tata group will invest in new aircraft and technologies to make Air India a world-class airline, besides undertaking an organisational redesign to make it future-ready like its other group companies.

ALSO READ - Air India prepares to add more than 200 aircraft; the most significant order in a long time

Air India plans to order more than 300 planes, even as it sells old aircraft. It recently invited bids for its three long-range, wide-bodied Boeing 777 planes.

ALSO READ - Air India issues tender to sell 3 B777-200LR aircraft

The company also wants to make the aerospace business its second biggest revenue earner after automobiles. 

Aloke Palsikar, executive vice-president, Tata Technologies said the work would include digitizing the fleet and equipment data of Air India and also bringing digital solutions to aircraft maintenance, repair and the overhauled unit that the Tatas acquired along with the airline.

"Air India is not just a business for the Tatas. There’s a lot of emotion involved.The entire strength of the Tata Group will be leveraged in putting Air India back on its feet. We are no different. The whole integration has started. We are in conversation with them on a lot of our domains.” Aloke Palsikar, Executive Vice-President and Head of Growth Industries and Nordics, Tata Technologies

Palsikar said the company aims to make the aerospace business its second-biggest revenue generator in three years. The addressable market for Tata Technologies is worth $50 billion and will grow by 50% in a year.