Airlines' financial health affected by the extended suspension of International Flights - Vistara

Radhika Bansal

22 Nov 2021

As the pandemic clouds are slowly clear, Vistara on Sunday, November 21 said a prolonged suspension of scheduled international flights to and from India is impacting the financial health of most airlines and also cautioned that it might be too early to conclude that the country's aviation sector is out of the woods.

The full-service carrier, which started flying to eight international destinations during the pandemic, has embraced a "nimble" approach amid the dynamic and unpredictable situation in the wake of the coronavirus pandemic as some countries are now witnessing rising infections.

Vistara CEO-designate Vinod Kannan said most predictions about the recovery of the aviation industry have been proven wrong in these times of great unpredictability, and it might be too early to say that the Indian aviation industry is completely out of the woods.

Vinod Kannan will be taking charge as CEO from January 1, 2022

On the domestic front, air traffic is nearing pre-COVID-19 levels and grew 70% in October compared with the year-ago period.

"A prolonged suspension of scheduled international operations is definitely impacting the financial health of most airlines, thereby adding to the pressure (on the revenue)," he told PTI.

In an email interview, Kannan, who is currently the airline's chief commercial officer, said that though the administration of vaccines across the globe has brought a lot of positivity and hope to the industry, the situation continues to be dynamic and unpredictable.

With continuously evolving travel restrictions in different parts of the world, "recovery of demand in the international segment still has a long way to go", he noted.

Scheduled international air services to and from India remain suspended since late March 2020 due to the pandemic. India has air bubble arrangements with more than 25 countries for operating overseas flights.

For now, the suspension is till November 30 and there is no clarity on normalisation as discussions are going on against the backdrop of a spike in the number of coronavirus cases in some countries.

Earlier this week, Civil Aviation Minister Jyotiraditya Scindia said the "process" is being evaluated for normalising overseas flight services.

During the pandemic, Vistara started flights to eight international destinations -- London Heathrow, Dhaka, Dubai, Doha, Frankfurt, Sharjah, Mal, and Paris.

"The momentum we have gained in this period on the expansion of our international footprint has been rewarding, helping us introduce our product to new markets and cementing our brand presence to help us prepare for the restart of scheduled international operations," Kannan said.

According to him, Vistara is observing an increase in preference for direct, non-stop flights on medium and long-haul routes, which gives impetus to its growth plans in the international market. "Despite the ongoing challenges, we continue to stay firm on our long-term expansion plans".

Kannan, who is to take charge as CEO from January 1, 2022, pointed out that certain international routes continue to be viable for operating special flights as part of travel bubble agreements as this provides flexibility but with largely limited opportunities to scale up.

(Image Courtesy - Travel + Leisure India)

However, he did not respond to a question on international airlines' body IATA recently said that India's air bubble arrangements are not driven by the pandemic but the desire to renegotiate its air services agreements.

"We see great potential for long-haul direct flights from India, and therefore, we have been steadily growing our global network under travel bubble agreements with a series of additions to our network," Kannan said.

Regarding starting flights to the US, he said operations to the US have several requirements and approvals that "we are currently working on".

"We aim to keep up the momentum that we have gained in the last one year on international expansion and have our plans in place to add 10-12 destinations to our network as soon as we can," he added.

Without sharing any specific numbers on the growth in yield and revenue as well as in passenger volume in the first half of the current fiscal, Kannan said the first few months were extremely tough.

Just when the industry had started seeing a marginal increase in passenger volumes, the second COVID-19 wave brought it down significantly with passenger load factors averaging around 50 per cent in April and May 2021, he said.

Further, he said that only since June 2021 that we have started observing a return of demand which led to the load factors going up to 72.4% in September.

"We have also been able to effectively leverage commercial cargo and charter flights which has significantly contributed to the bottom line," Kannan said.

With the ongoing festive season and year-end holidays coming up, he said Vistara was hopeful that passenger traffic will continue to rise and normalcy returns gradually.

In October, domestic air traffic rose 70% year-on-year to 89.85 lakh passengers, as per the latest DGCA data.

On expenses, Kannan said Vistara has been nimble in its approach from the beginning and took several measures to reduce non-customer facing operating expenditures while making every effort to conserve cash wherever possible.

The airline, he said, continues to leverage opportunities such as commercial cargo, charter flights, and introduce multiple ancillary services in our effort to generate additional revenue.

(With Inputs from PTI)

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GMR to develop and operate Indonesia's Medan Airport

Radhika Bansal

21 Nov 2021

Expanding its footprint overseas, the aviation infrastructure major GMR Infrastructure Limited's subsidiary, GMR Airports Limited (GAL) won the bid to develop and operate the Kualanamu International Airport (Medan Airport) in Medan, Indonesia.

GMR Airports Limited and its wholly-owned subsidiary, GMR Airports International B.V, bid for the project as a consortium.

The group will tie-up with the state-owned enterprise, Angkasa Pura 2 (AP2) on a 49:51 basis.

Kualanamu International Airport, Medan, Indonesia (Image Courtesy - Shutterstock)

The consortium will transform Kualanamu International Airport into the Western International hub of Indonesia.

As per a press statement issued by the company, Medan is the fourth-largest urban area in Indonesia and is the capital of North Sumatra province.

"The airport handled more than 10 million passengers in 2018. Kualanamu International Airport is an operating Airport with healthy cash flows," it read.

The letter of award is expected to be issued in the next few days, while the post-bid formalities and the signing of project agreements are expected to be completed before the end of the year.

"GMR Airports Limited is delighted to have been announced the winning bidder for the development and operation of Kualanamu International Airport in Medan, Indonesia.The project marks the entry of GMR Airports in the fast-growing Indonesian Aviation sector - the largest in ASEAN and a high potential market.The bid win reinforces GMR Group's credentials as one of the largest airport developers and operators across the world.The group would like to take the opportunity to reiterate its commitment to transform Medan International Airport into a Western International hub of the Southeast Asian nation as well as contribute to the overall infrastructure development of the country."Srinivas Bommidala, Chairman Energy and International Airports, GMR Group

GMR, the largest private airport operator in Asia and fourth-largest globally, handles over 17.2 crore passengers annually in pre-Covid times. Its operational airport portfolio includes India’s busiest IGIA in Delhi, Hyderabad and Mactan-Cebu International Airport in Cebu, Philippines. GMR is currently developing three major greenfield airports at Goa, Visakhapatnam and Crete in Greece.

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FAA halts B787 deliveries due structural issues

Prashant-prabhakar

21 Nov 2021

Production issues don't seem to elude Boeing as the company seems to be confronting a new set of issues with its B787 Dreamliner now.

Although this wouldn't be the first time as the Dreamliner has been beset with issues ever since the fall of 2019. Back then, the company said that some of the plane's fuselage was not assembled together following precise standards.

According to a recent memo by the FAA, new issues with regards to contamination of the carbon fibre composite material during fabrication of the large structures that make up the 787’s wing, fuselage and empennage, have cropped up. And apparently, these weren't reported earlier.

Although considered not to pose an immediate threat to safety, these issues are prevalent in more than 1000 Dreamliners in service today.

We’re looking at the undelivered airplanes nose to tail, and we have found areas where the manufacturing does not conform to the engineering specifications. None of these issues is an immediate safety-of-flight issuea Boeing spokesperson said Friday

The FAA memo further details that Boeing doesn't have conclusive data on how many planes could have been possibly affected.

Contamination of carbon composites as stated by Boeing

Twitter

The company had informed the FAA earlier this year regarding contamination of the composite material during fabrication that could potentially weaken the bonding when two composite parts are bonded together with adhesives. Apparently, this was detected by Mitsubishi Heavy Industries in Japan- a firm that builds carbon-composite wings for Boeing.

According to reports, the use of PTFE (polytetrafluoroethylene), left a residue after removal during the process, which failed to comply with Boeing's manufacturing standards.

Boeing further revealed that identical contamination has been detected in major other suppliers affecting not only the wing but also the fuselage and tail.

Additionally, further composite tests showed contamination in certain areas to be below the allowed design limits.

The FAA will investigatesays the memo

Boeing's communications team were quick to respond that it would be too early to comment on the issue as they didn't have enough data on the specifics.

We don’t comment on ongoing discussions with manufacturersan FAA spokesperson

The memo further mentions the use of an incorrect alloy of titanium in certain fittings installed in fuselage sections made by Leonardo in Italy.

Airline Ratings

These could lead to a further potential delay in deliveries of the 787 which could cost dearly to the company, considering Boeing had already registered nearly $20 billion in core operating losses over the last eight quarters.

COVER: Fox Business

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Tamil Nadu based firm to manufacture and supply over 600 critical components for Boeing

Prashant-prabhakar

21 Nov 2021

To give a brief introduction, Aerospace Engineers Pvt Ltd (AEPL), is a Salem based firm, founded by Sundaram Ramaswamy Naidu- a polymer technologist from the Madras Institute of Technology.

The Federal

Up until now, the firm had been a Tier 2 supplier for Boeing. Reportedly, the company has now bagged a long-term contract with US-based aerospace giant Boeing to manufacture and supply 683 critical components, from the first quarter of 2022.

Apparently, the company also ships components for Airbus and Roll Royce as well.

Clamps and fittings for the aircraft engines will be our first deliverySundaram

The company plans of fusing 150 crores into supporting its expansion strategy which would additionally employ around 1000 people.

Sundaram's expansion plans also happen to be run by the state government's "Make in Tamil Nadu’ initiative. Furthermore, this comes at a time when the Union Government plans of establishing a defence corridor in the state.

Boeing-AEPL deal finalization | The Salem Aeropark

In addition to the facility at Salem, AEPL is setting up another 1,25,000sqft manufacturing facility, dedicated to civil aerospace production in Hosur. 

A brief history about the man himself

A chance meeting with the late president APJ Abdul Kalam is what pushed Sundaram to bury his inhibitions and chase his goals.

In 1994, when a UK based firm that supplied cockpit rubber seals shut down, Kalam expressed the thought of manufacturing them indigenously in India.

Eventually Sundaram, in collaboration with DRDO and HAL, would go on to manufacture the cockpit rubber seals, to be later tested by Rakesh Sharma-India's first astronaut and commander at HAL at the time.

We discovered that our seal could survive cabin pressure for 65 seconds, but imported cockpit seals could only withstand it for 14 seconds. After successful testing, Sharma stated that our device is superior to the stimulatorSundaram

In addition to making components for ISRO and DRDO, the company manufacturers cockpit seals present in most of the birds flying in Indian airspace today.

The Salem Aeropark

Many of our components are used in aircraft such as MIG-21, 27 and 29, Hawk Aircraft, Sukhoi SU 30, missiles such as Tejas, Brahmos and Akash, helicopters such as Dhruv, and rockets such as GSLV and PSLVSundaram

With the acquisition of the recent order, the company has turned Tier 1 and would now be shipping components to Boeing directly.

COVER: The Economic Times

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IndiGo is APAC's largest airline by capacity and the world's tenth-largest airline - OAG

Radhika Bansal

20 Nov 2021

IndiGo has emerged as the tenth-largest airline globally and the largest in the Asia Pacific by seat volume, according to UK-based air consultancy firm OAG.

The low-cost carrier has 280 aircraft currently in its fleet that operate over 1,400 daily flights.

In pre-pandemic times, the airline had about 1,600 daily flights of which 400 to 450 were international.

At the moment it has about 1,400 daily flights of which nearly 80 are international, airline CEO Ronojoy Dutta had recently told TOI.

OAG on Friday, November 19 released a report on “essential metrics on the world’s major airlines” comparing the capacity of airlines in the summer of 2019 (March 31, 2019, to October 26, 2019) and with this summer.

IndiGo “is operating at almost three-quarters of summer 2019 levels in capacity terms and is currently the tenth largest airline globally. Although predominantly a domestic airline, 9% of IndiGo’s summer ’19 capacity operated internationally.

Currently, international airline capacity is only operating at 37% of summer 2019 levels,” the report says.

IndiGo this summer, says OAG data, had 3.7 crores deployed seat capacity.

Southwest and Delta Airlines stand at first and third positions respectively. (Image Courtesy - Dallas Morning News)

The other big airlines globally ahead of IndiGo in terms of seat capacity deployed include - Southwest Airlines (10.8 crores), American Airlines (9.6 crores), Delta Airlines (8.8 crores), China Southern Airlines (7.9 crores), China Eastern Airlines (7.2 crores), United Airlines (6 crores) and Air China (4.9 crores).

In terms of deployed seat capacity, OAG data shows IndiGo operated 73% of overall seat capacity this summer over the same period two years ago, or 2019 — the last pre-pandemic year.

The recovery rate of other big Asian Pacific — Lion Air (second rank capacity wise, 60%); All Nippon (rank 3, 43%); Japan Airlines(rank 4, 50%) and Qantas (rank 5, 43%) is much lower.

(Image Courtesy - Business Wire)

OAG is an Air Travel Intelligence company that specialises in the delivery of digital information and travel planning solutions to clients such as airlines, airports, government agencies and travel-related service companies.

The company offers flight status and scheduling data, as well as analysis tools to facilitate commercial planning and business decisions. With its headquarters in Luton, OAG has international offices in the United States, China, Japan and Singapore.

IndiGo is a low-cost carrier based in Gurgaon, India that commenced operations in August 2006. The carrier, which is owned by Rahul Bhatia’s InterGlobe Enterprises, operates an extensive domestic network and international services to South Asia, Southeast Asia, Europe and the Gulf.

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SpiceJet's Boeing 737 Max goes through an 'operational readiness' check

Radhika Bansal

20 Nov 2021

For the first time since the Boeing 737 Max's global grounding in March 2019, Indian airlines, both existing and new, are preparing to fly passenger flights on the plane.

SpiceJet currently has 13 leased Max in India, and one of them is scheduled to fly its "operational readiness" flight (without passengers) on Friday, November 19 after undergoing the necessary hardware and software modifications.

More SpiceJet Max aircraft will undergo readiness flights in the coming days before returning to service for commercial flights, which is expected to happen very soon.

Billionaire investor Rakesh Jhunjhunwala’s Akasa has ordered 72 B737 Max which it will start getting in time for the planned launch in the summer of 2022.

B737 Max’s return of service — and more importantly winning people’s confidence back — of the Max is crucial for Boeing, SpiceJet and Akasa in India.

Boeing desperately needs the Max to succeed to take on arch-rival Airbus whose A320neo has been a runaway commercial success.

Cash-strapped SpiceJet needs fuel-efficient planes to survive in a cost-hostile environment when crude prices are spiralling and its competitors in India are doing so.

In fact, IndiGo will by the end of 2022 replace all its older A320 ceos with the neos.

SpiceJet has cut flights this winter and is now number four in terms of domestic market share with GoAir overtaking it last month, as per DGCA data.

IndiGo — the world’s biggest customer of Boeing arch-rival Airbus A320 neo — remains the market leader by a huge margin, followed by Air India and GoAir. It needs deliveries of Max to resume for phasing out older fuel-inefficient planes and then grow its fleet once the replacement is completed.

For Akaksa it is crucial Indian flyers have accepted the Max by the time it launches next summer.

The Directorate General of Civil Aviation (DGCA) had this August allowed the Max to fly again “upon satisfaction of applicable requirements for service return” — meaning carrying out required changes to ensure safety.

The MAX aircraft were globally grounded in March 2019 following two crashes — one of Indonesian Lion Air and another of Ethiopian Airlines — in quick succession.

The two crashes had claimed the lives of 346 people on board these planes.

Last year, Boeing finalised software and hardware modifications to ensure safety on the Max. These changes were vetted and approved by foreign aviation regulators, including those of the country of manufacture USA, EU, UAE, Singapore and UAE.

India was among the last to approve the changes and allow modified Max to fly again, with China the only major country yet to clear it.

“Worldwide 17 regulators have permitted operation of Boeing 737 Max airplane. A sizeable number of airlines (34) with B737 Max airplane (345) are operating currently… since the un-grounding from December 9, 2020, with no untoward reporting,” the Indian DGCA order of August 26, 2021, permitting the Max to fly again in the country says.

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