Aviation stocks soaring as India set to resume international flights

Indian aviation stocks, including SpiceJet, IndiGo parent InterGlobe Aviation, and Jet Airways, rose 5-8% each on March 9 after the civil aviation ministry announced on March 8 resumption of international flight operations from March 27.

"The suspension of scheduled commercial international passenger services to/from India, thus, stands extended only up to 23:59 hrs IST on 26.03.2022 and air bubble arrangements shall accordingly be extended to this extent only," the ministry had said.

Aviation stocks soaring as India set to resume international flights

ALSO READ - India to restart scheduled international flights after 2 years from March 27

The move is intended to improve international capacity while also lowering airfares, which have been rising owing to increased demand and higher crude oil prices. International operations shall be subject to strict adherence to the health ministry's guidelines.

Earlier on February 28, the Directorate General of Civil Aviation (DGCA) had extended the ban on regular international flights until further orders.

However, the DGCA said that the flights that are operational under air bubble arrangements, as well as international cargo flights, will continue as scheduled.

Scheduled international flight services have remained suspended since 23 March 2020.

Scheduled international flight services have remained suspended since 23 March 2020. However, special flights have been operating between India and about 35 other countries since July 2020 under air bubble arrangements.

India currently has air transport bubbles with 40 countries including Canada, France, Germany, United Arab Emirates, the United Kingdom, and the US.

SpiceJet was quoting at INR 59.85, up to INR 2.85 or 5%, and InterGlobe Aviation was quoting at INR 1,705.65, up to INR 105.60 or 6.60%, and Jet Airways was quoting at INR 93.90, up to INR 4.45 or 4.97% on the BSE.

The Odisha government has decided to fast track the development of a new airport in Malkangiri in the southern part of the state and make it operational in two years, an official said on March 8.

The airport in Malkangiri, which is the farthest from state capital Bhubaneswar, will boost the quality of health and education services in the district, the official said.

"The airport will enhance the economic and commercial activities in the district," Chief Secretary Suresh Chandra Mohapatra said. He reviewed the progress of the construction of the new airport in Malkangiri at a virtual meeting from state secretariat Loka Seba Bhavan, according to a release on March 8.

Malkangiri airport in southern Odisha is scheduled to open in 2024

Mohapatra told the Works Department to operationalise the airport by January 2024 in the first phase, following which it would be extended for bigger flights as the demand grows.

He directed officials to clear the obstacles for laying an airstrip of 800-1,000 metres, finish a detailed project report and issue a tender.

Principal Secretary, Commerce and Transport Department, Bishnupada Sethi said the Malkangiri airfield could be developed as a Category IIB airport.

The administrative approval has also been accorded for the project, estimated at around INR 29 crore. It would involve 233 acres of government, private and forest land.

The land acquisition is over and the raising of concrete posts with barbed wire fencing has been completed.

The land acquisition is over and the raising of concrete posts with barbed wire fencing has been completed. The obstacle limitation surface survey was completed by the Airports Authority of India (AAI).

Around 54 families who needed to be shifted were included under the rural housing schemes and its construction has been done.

The chief secretary told the Rural Development and the Panchayati Raj departments to hand over two roads to the Works Department, which would strengthen those based on the required specifications. He directed the Tata Power Southern Odisha Distribution Ltd to shift the existing electrical lines by June.

A seven-member technical team of the Airports Authority of India (AAI) Tuesday, March 8 undertook an on-the-spot verification of the Sipasarubali area in the outskirt of the pilgrim town, for the proposed international airport in Puri.

The technical team's visit came after Union Civil Aviation Minister Jyotiraditya Scindia during his visit to Jharsuguda said that the AAI had already sent a complete report for an international airport at Puri to the Odisha government and is awaiting its response on developing a greenfield airport at Puri.

The team comprised AAI's four officials from Delhi and three from Bhubaneswar airport.

The team comprised AAI's four officials from Delhi and three from Bhubaneswar airport. They surveyed Sipasarubali in Puri Sadar block and also examined the land map and other documents in presence of Puri Sub-Collector Bhabataran Sahu.

The team also held discussions with Puri Collector Samarth Verma on the proposed project. Chief Minister Naveen Patnaik in 2021 had written a letter to Prime Minister Narendra Modi where he strongly demanded setting up an international airport at Puri.

The team also held discussions with Puri Collector Samarth Verma on the proposed project.

ALSO READ - Centre plans to set up a Greenfield Airport at Puri

The AAI approved 1,500-acre land at Sipasarubali near Girala in Brahmagiri Mouza of Puri district after conducting a pre-feasibility study in June 2021.

Union Minister of State for Civil Aviation VK Singh had also said that the responsibility of implementing the airport project including obtaining necessary approvals from the Centre rests with the project proponent concerned which is the state government.

Domestic air passenger traffic recorded a growth of 19% month-on-month in February at 76 lakh aided by a decline in Omicron wave, research and rating agency ICRA said in a report.

However, on a year-on-year basis, the traffic was down 2.6% during the month. While the decline in the Covid wave is aiding the rise in passenger traffic, with daily passenger traffic at about 334,000 currently, the rise in aviation turbine fuel price remains the major headwind for airlines.

Domestic air passenger traffic increased by 19% in February

The ongoing armed conflict between Russia and Ukraine has led to a rise in crude oil prices, with Brent crude oil hovering around USD 127 per barrel.

“One major concern that continues to be a drag on the aviation sector is the aviation turbine fuel (ATF) prices, which have seen a sharp increase of about 57% on a Y-o-Y (year-on-year) basis till March 2022. It is mainly attributed to increasing in crude oil prices. This, coupled with relatively low-capacity utilisation of aircraft fleet, will continue to weigh on the financial performance of Indian carriers in FY22."Suprio Banerjee, Vice President and Sector Head, ICRA

ALSO READ - Domestic aviation industry expected to report a net loss of INR 26,000 crore this fiscal

In an earlier report, the agency had outlined that domestic air passenger traffic is estimated to record year-on-year growth of 50-55% in 2021-22 (Apr-Mar), but high fuel prices and fare caps would dent the profitability of airlines, with the industry expected to record a loss of INR 25,000-26,000 crore during the current fiscal.

The world stares in disbelief as Russia continues its onslaught on its neighbour and this has resulted in worldwide sanctions against the former Soviet Union.

According to analysts, with the sanctions in place, it is highly unlikely that Russian citizens would be flying to Europe or North America anytime soon or even flying to friendly countries such as China.

Representative | Reuters

Russia will be the world’s largest country with a developed economy and an aviation industry no better than North Korea’s. Aviation sanctions are easy to enforce. Airlines can’t fly. They will have to completely redo their aircraft plans, which at the moment, are built on Western technology.Richard Aboulafia, managing director of Michigan-based AeroDynamic Advisory, told Al Jazeera

With the country ostracised from the rest of the world, how is it going to impact airline operations worldwide?

Rising fuel prices translating to increased airfares

With sanctions against Russian fuel supplies, one obvious outcome is higher fuel costs. Fuel being a critical factor in an airline's overall expenditure, the rising prices at a time when they are just recovering from a multi-year slump, can deal a severe blow to fragile companies. Additionally, it will mean higher ticket prices for travellers and a further delay in profitability for airlines.

Representative | The Economic Times

An extra hour of flight time and the fuel that would burn will add somewhere between €8,000 to €15,000 onto a journey.  That would work out at around €100 per seat on a full planeestimates John Gradek, an aviation expert and lecturer at Canada’s McGill University.

Closed Russian airspace meaning aircraft now have to re-route or cancel flights

The UK and Russia have both barred flights from overflying their territory. American flights crossing over into Asia often use routes over the North Pole and then fly down over Russia into China, Japan, Singapore, and more. Additionally, Middle-Eastern airlines also use Russian airspace to fly to Asia and Australia.

Representative | FlightRadar24 | Twitter

Finland’s flag carrier, Finnair, has described itself as “the shortcut between Europe and Asia". Given the current scenario, it will have to re-route a significant number of flights, considering its proximity to Russia. Finnair planes are still flying to Bangkok, Singapore, Phuket and Delhi but with an extra hour added to the overall flight time.

AeroTime Hub

Russian planes can still fly to the Middle East, to Doha, or Kolkata, considering their ties with respective countries. Passengers would now need to board an Aeroflot flight - or Qatar, Emirates, or other airlines still allowed into Russia - before transferring at a transit airport outside of the country.

Flights could either be cancelled or re-routed to avoid the possibility of accidentally infringing into Russian airspace. The revised routes will definitely lead to more fuel consumption, increased crew time and possibly reduced passenger load and cargo due to the extra distance.

Representative | Source

Flights from Europe to Asia that would normally pass over Ukraine and Russia have now been rerouted south to the airspace over Turkey, Iran and Afghanistan.

Titanium supplies-a major requirement for aircraft and engine manufacture, could get hit

Representative | FS Precision Tech

Titanium with its high strength to weight ratio is an ideal and critical component used in the manufacture of airframes and engines. Russia, being a significant exporter of titanium, a cut-off in this supply could spell disaster for existing production lines of aircraft and engine manufacturers.

Aircraft lessors in the West could have a tough time re-acquiring their assets

In response to the recent sanctions imposed, aircraft leasing firms around the world are set to terminate their standing leases with Russian airlines.

Russia has about 980 passenger jets in service, out of which 777 are leased, according to analytics firm Cirium. Out of the 777, about 515 jets are leased from foreign firms with an estimated market value of about $10 billion.

Representative | The National

AerCap-an Irish based and the world's largest aircraft leasing company saw its New York-listed shares tumble by as much as 12.7% after it announced it would cease leasing activity with Russian carriers.

Representative | AerCap

Three out of every four passenger and cargo jets in Russian service today are from Boeing or Airbus, which supply more than 300 aircraft each.

Russia is a member of the Cape Town Convention (found in 2001)-designed to prevent an airline from absconding with an aircraft, although it is unclear as to how Russian courts would respond to a request to surrender the foreign assets.

The European Union has mandated all leasing companies to terminate their contracts with the Russians by the 28th of this month.

The absence of peace and stability can have a profound impact on global aviation, as is clearly evident and it would be safe to say that with the current Russia-Ukraine aggression, we have literally travelled 30 years back, in the wink of an eye.

SOURCE(s)

COVER: Air Cargo News

The global commercial flight industry fared better on safety parameters in 2021 as the accident rate fell and for the first time in at least 15 years.

There were no runway or taxiway excursion accidents, said airlines trade body, International Air Transport Association (IATA) in its recently released 2021 safety performance data.

“Safety is always our highest priority. The severe reduction in flight numbers last year compared to the 5-year average magnified the impact of each accident when we calculate rates. Yet, in the face of numerous operational challenges in 2021, the industry improved in several key safety metrics. At the same time, it is clear that we have much work ahead of us to bring all regions and types of operations up to global levels of safety performance.In the face of numerous operational challenges in 2021, the industry improved in several key safety metrics. At the same time, it is clear that we have much work ahead of us to bring all regions and types of operations up to global levels of safety performance."Willie Walsh, Director General, IATA

In 2021, the rate was one accident for every 9.9 lakh flight, while a year earlier it was one for every 6.3 lakh flight in the year 2020, it said. In 2021, 2.5 crore airline passenger flights were operated out of which 26 met with accidents. Within these, 7 were fatal crashes that killed a total of 121 people.

In the five previous years (between 2016 and 2020), runway and taxiway excursion accidents had the highest frequency of accidents worldwide. Between those years, IATA registered 79 excursions, nearly 30% of all the accidents in that span.

A runway excursion occurs when an aircraft departs the runway in use during the take-off or landing run

A runway excursion occurs when an aircraft departs the runway in use during the take-off or landing run. There are also runway incursions, although those are less frequent.

Despite IATA claims, there were a few runway excursions in 2021, although not directly related to commercial aviation. For instance, a test flight for an Irkut MC-21 prototype aircraft slid off the runway and got stuck in the snow at Moscow-Zhukovsky airport in January 2021.

Among the fatal crashes, one involved a large passenger jet aircraft — the Sriwijaya Air Boeing 737-500 crash in Indonesia on January 9, 2021, which killed all 61 people, and the rest were smaller turboprop accidents.

Air India Express aircraft crashed in Calicut on August 7, 2020, which killed 21 people.

In 2020, 2.22 crore airline flights were operated, 35 accidents occurred, out of which 5 were fatal with a total death toll of 132 people. Among them was the Air India Express crash in Calicut on August 7, 2020, which killed 21 people.

Within the commercial airline industry, IATA member airlines fared better, with one accident for every 22 lakh flight in 2021, while the rate in 2020 was higher at one accident for every 13 lakh flight, showed the report.