Domestic Air Passenger Traffic notably falls in April-December 2021

The current rising situation of the third wave is having an enormous impact on the aviation industry, affecting passenger traffic, air cargo demand, airport workforce, and incoming revenues. According to rating agency ICRA, domestic air passenger traffic remained 44% lower in April-December 2021 at 111 lakh against the corresponding period of 2019-20.

Airports facing low Domestic Air Passenger Traffic

The total domestic passenger traffic was 73 lakh in December 2020 and saw growth in December recorded at 5-6% over November 2021, during which Indian carriers had flown 105 lakh passengers. The average daily departures stood at around 2,800, notably higher comparatively 2,065 in December 2020 and 2,700 in November 2021. The average number of passengers per flight during December 2021 was mainly flat at 129 compared to 130 in November.

The situation of the Aviation Industry amid present restrictions

With the emergence of the new coronavirus variant and the recent trend of rising infections, few states have already started announcing certain curbs on domestic air travel, posing a serious threat to domestic passenger traffic recovery in the near term. Airlines' capacity deployment for December 2021 stood at around 35% higher than December 2020 (86,465 departures in December 2021 against 64,002 in December 2020), as mentioned in the report by ICRA.

As per ICRA, one serious concern that continues to increase in the aviation sector is the aviation turbine fuel (ATF) prices, which have seen a sharp increase of 49% on a year-on-year basis till January 2022, mainly on account of an increase in crude oil prices. This data, coupled with relatively low capacity utilization of aircraft fleet, will continue to weigh on the financial performance of Indian carriers in 2021-22.

Empty International Airports (Picture credit: Reuters)

Amid the omicron variant rising situation India's largest airline in terms of market share, IndiGo said it will reduce its capacity by 20% due to the ongoing wave of the covid-19 pandemic. The airline also said it is waiving off change fees for all new and existing bookings made for flights up to 31 March 2022, as a large number of passengers are changing their travel plans due to the rising number of infections. Not only IndiGo, airlines like SpiceJet, Air India, and others have also started to introduce low price indexes and provide special offers to the passengers.

The Centre recently has also announced a seven-day mandatory home quarantine for all international arrivals in the country from January 11 till further orders. As per the data, India India on January 11, 2021, reported 1,68,063 new Covid-19 cases and 277 related deaths even as the country’s active count mounted to 8,21,446, data from the Union Ministry of Health showed. The daily positivity rate stood at 10.64%. The Omicron tally, meanwhile, has reached 4,461, with Maharashtra reporting the highest number of cases (1,247), followed by Rajasthan (645) and Delhi (546).

In a recent interview, Vinay Dube CEO of Akasa Air shared his views about the airline's business model, plans, market potential, and how technology will be a key differentiator for the airline.

Akasa Air, India’s newest airline-to-be, awaits the final nod from the government even as the country’s air travel demand takes its latest hit during the ongoing omicron variant Covid wave. The airline, majority-owned by Rakesh Jhunjhunwala and co-founded by former IndiGo president Aditya Ghosh, has ordered 72 Boeing Max 737 aircraft and aims to start flying this summer.

Vinay Dube, CEO, Akasa Air

Launch amid third wave

Akasa Air plans to launch by this summer: in May, June, July timeframe. Though still working on their regulatory approvals that are required for the airline to start and also many other things beyond the regulatory approvals that an airline requires to launch commercial operations.

"There is no change in our approach. In fact, we have not yet locked in on the first or second routes that we will operate on. We will work with various airports, both private and the Airport Authority of India to see what we actually get from them in terms of slots and parking bays. We are entering aviation for what we feel is going to be an industry that will continue to grow for the next 20 to 50 years plus. And so, we are entering not to be able to take advantage of the timing but for the demand that we think is going to be growing in India for the next several decades. We're in it for the long run."Vinay Dube, CEO, Akasa Air

Akasa Air

Receiving Aircraft and creating team

The first aircraft is expected to come sometime after the 15th of April. They will need that first aircraft for the completion of their air operators’ certification (AOC) process. He further mentioned that they expect to have 18 aircraft by March 2023. Talking about the team construction, Akasa Air now has over 50 people and has started recruiting cockpit and cabin crew.

Is Akasa a ULCC?

"We have no intention at all of being a ULCC. And I think there's been a bit of misunderstanding in the way it came out initially. I want to crush the rumors of the ULCC model right now so that it’s never associated with Akasa. We want to be a dependable airline, and we want to be an affordable airline. And that is our business model. We will have a single type of aircraft, a single category of seats, we are not going to have a business class, we're not going to have a premium economy, we will have buy onboard, like others in our category." Vinay Dube, CEO, Akasa Air

Further, he talked about his experiences and the work done in the past. Akasa Air's CEO was firm about his concepts and clear about the upcoming launch of the airline despite pandemic constraints. Talking about the future of aviation he was found eager and optimistic towards the growing industry.

Akasa Air received a No Objection Certificate from the Ministry of Civil Aviation in October 2021. The airline is in the process of receiving it's Air Operator's Certificate (AOC) next as well. After receiving an AOC the airline will start operations within 3 to 6 months. The airline is aiming to launch flights in the summer of 2022. It has been stated that they will receive the aircraft by the end of April.

On December 22, 2021, the airline unveiled its brand identity, logo, and livery with the tagline It's Your Sky. The airline said the symbol 'rising A' was inspired by elements from the sky - "It symbolizes the warmth of the rising sun, the effortless flight of a bird and the dependability of an aircraft wing".

Among other details, Akasa Air unveiled its leadership team with Vinay Dube being the airline’s founder, managing director, and chief executive officer. Belson Coutinho will be the airline’s chief marketing and experience officer, Ankur Goel will serve as its chief financial officer and Praveen B Iyer will fill the role of a chief commercial officer. Aditya Ghosh, IndiGo Airline’s former president, is Akasa’s co-founder.

Airbus delivered 611 commercial aircraft to 88 customers in 2021, demonstrating resilience and recovery with progress on ramp-up plans, Airbus said in a recent press release.

In 2021, deliveries comprised:

  AIRCRAFT TYPE 2021 2020 A220 Family 50 38 A320 Family483446 A330 Family1819 A350 Family5559 A38054 TOTAL 611 566 Airbus' aircraft deliveries in 2021 and 2020. (Data - Airbus)

Approximately 25% of commercial aircraft in 2021 were delivered using the established “e-delivery” process, allowing customers to receive their aircraft with minimal need for their teams to travel.  

“Our commercial aircraft achievements in 2021 reflect the focus and resilience of our Airbus teams, customers, suppliers and stakeholders across the globe who pulled together to deliver remarkable results. The year saw significant orders from airlines worldwide, signalling confidence in the sustainable growth of air travel post-COVID.While uncertainties remain, we are on track to lift production through 2022 to meet our customers’ requirements. At the same time, we are preparing the future of aviation, transforming our industrial capabilities and implementing the roadmap for decarbonisation.”  Guillaume Faury, Chief Executive Officer, Airbus

In 2021, Airbus doubled its gross order intake compared to 2020 with 771 new sales (507 net) across all programmes and market segments demonstrating the strength of the company’s full product range and signalling renewed market confidence. 

Commercial aircraft deliveries of 2021. (Image Courtesy - Airbus)

The A220 won 64 firm gross new orders and several high profile commitments from some of the world’s leading carriers. The A320neo Family won 661 gross new orders. In the widebody segment, Airbus won 46 gross new orders including 30 A330s and 16 A350s of which 11 were for the newly launched A350F which also won an additional 11 commitments. 

In the number of aircraft units, Airbus recorded a gross book to bill ratio above one. At the end of 2021, Airbus’ backlog stood at 7,082 aircraft. Airbus will report Full Year 2021 financial results on 17 February 2022.

Airbus delivered 611 commercial aircraft to 88 customers in 2021. (Image Courtesy - ABC News)

Airbus deliveries frequently surge in the final month of the year, but supply chain problems have hampered deliveries of some medium-haul jets while the spread of Omicron has raised fresh doubts over the likelihood of an early rebound in long-haul travel.

ALSO READ - Airbus maintains its lead and surpasses its goal with 610 deliveries in 2021

In Dubai Airshow 2021, Airbus got 412 new aircraft orders. These orders include 269 firm orders as well as 143 commitments.

Let's have a look at them -

Wizz Air - 102 aircraft (75 x A321neo + 27 x A321XLR)Frontier - 91 aircraft (A321neo)Volaris - 39 aircraft (A321neo)Jet Smart - 23 aircraft (21 x A321neo + 2 x A321XLR)Air Lease Corporation (ALC) - 111 aircraft (25 x A220, 55 x A321NEO, 20 x A321XLR, 4 x A330NEO, 7 x A350F)Signed formal MoU with CMA CGM - 4 x A350FUnited Arab Emirates Air Force and Air Defence - 2 x A330MRTTIndonesian Ministry of Defence - 2 x A400MJazeera Airways - 28 x A321neoIbom Air - 10 x A220

ALSO READ - Indigo Partners placed a mega order for Airbus A321neo jets

ALSO READ - Dubai Airshow 2021 comes to an end. Let’s have a look at the top deals at the aviation summit

Indian Deliveries

InterGlobe Aviation Ltd, the operator of IndiGo, took delivery of a record 36 Airbus SE planes between January and November 2021, according to data from the European planemaker.

In comparison, the other major Airbus customer in India, Wadia-Group operated GoFirst took delivery of six planes in the same period. GoFirst, which has orders for 144 A320neo planes, took delivery of 52 such aircraft by the end of November. This is an increase from 46 A320neo planes at the end of January.

IndiGo took delivery of a record 36 Airbus planes between January and November 2021. (Image Courtesy - IndiGo)

IndiGo, which had ordered 344 A320neo planes, took delivery of 120 such planes by the end of January 2021, increasing to 137 by the end of November. It also ordered about 386 A321neo planes. It had taken delivery of 30 Airbus A321neo planes by the end of January 2021, increasing to 49 by November-end.

Overall, IndiGo has ordered 730 A320-A321 families of planes so far. It has taken delivery of 186 such aircraft till November-end.

Disputes

Qatar Airways in December had started proceedings in a UK court against Airbus in a bid to resolve a dispute over skin flaws on A350 passenger jets, bringing the two sides closer to a rare legal showdown over aviation safety.

The companies have been locked in a row for months over damage, including blistered paint and corrosion to a sub-layer of lightning protection, which Qatar Airways says has now led to the grounding of 21 A350 jets by its domestic regulator.

The middle east major is seeking $618 million in damages from the manufacturer, Airbus in a dispute over untimely erosion of the surface of some of its A350s, according to the court documents.

Qatar Airways seeks $618 million in damages from Airbus in a dispute over untimely erosion of the surface of its A350 Aircraft. (Image Courtesy - Qatar Airways)

Airbus insists the carbon-composite passenger jets are safe to fly despite some “surface degradation,” while Qatar Airways says it is too early to say whether safety has been compromised.

The dispute came to a head when Airbus, in what experts called an unprecedented move, accused the Gulf airline of misrepresenting the problem as a safety issue and threatened to call for an independent legal assessment.

The airline operates 53 A350s, although 20 of the jets have been grounded on the instructions of the Qatari Civil Aviation Authority. Qatar has another 23 on order but has halted further deliveries during the dispute. Singapore Airlines is the biggest operator of the A350.

ALSO READ - Qatar airways sue Airbus for USD 618mn over A350 paint issue

ALSO READ - Qatar Airways takes Airbus to London High Court over A350 skin damage

ALSO READ - In a paint dispute with Qatar Airways, Airbus goes legal

Air India on Sunday, January 9 introduced special features for its travellers wherein they can modify the number, dates, or sector of their flight booking until March 31 under 'One Free Change'. The feature has been introduced because of the current prevailing situation of COVID-19.

The announcement came for all domestic flights because of “uncertainties" due to the rising Covid-19 cases in India.

In a tweet today, Air India said, "#FlyAI: Because of recent uncertainties due to surge in COVID cases, Air India is offering ONE FREE CHANGE of date or flight number or sector for all domestic tickets (098) with confirmed travel on/before 31.03.22."

https://twitter.com/airindiain/status/1480183124797517829

The aviation sector has started to suffer again as Covid cases are beginning to rise across the country.

In a similar move, IndiGo also waived fees for all its passengers as it cancelled about 20% of flights because of the Covid situation.

"Owing to the increasing number of Omicron infections, large numbers of IndiGo customers are changing their travel plans. In response to customer needs, IndiGo is waiving change fees and is offering free changes for all new and existing bookings made up to January 31, for flights up to March 31, 2022. With the reduced demand, we will also be selectively withdrawing some of our flights from service."IndiGo

Amid a surge in the Covid-19 cases, the Central government on Friday, January 7 announced a seven-day mandatory home quarantine for all international arrivals in the country. All the international arrivals in the country will have to observe a seven-day mandatory home quarantine with effect from January 11 till further orders.

As per the order issued by the Ministry of Health and Family Welfare on Friday, January 7, travellers from specified countries at risk will at first, submit a sample for the post-arrival Covid-19 test at the point of arrival (self-paid). Such travellers will be required to wait for their test results at the arrival airport before leaving or taking a connecting flight.

"If tested negative they will follow, home quarantine for seven days and shall undertake RT-PCR test on the eighth day of arrival in India. Travellers shall also be required to upload results of repeat RT-PCR test for Covid-19 done on the eighth day on the Air Suvidha portal. If negative, they will further self-monitor their health for the next seven days. However, if such travellers are tested positive, their samples should be further sent for genomic testing at INSACOG laboratory network," read the order copy.

ALSO READ - IndiGo waives rescheduling fees and may slash flights by 20% due to Omicron

At first glance, ''ghost flights'' may sound something out of a Hollywood horror flick, with ''Casper-the friendly ghost" in the flight deck perhaps? We'd wish!

A "Ghost Flight" is essentially a planned route flown by airline ''regardless'' of the passengers on-board. And there's a real good reason why planes do that.

Airport World

The European Commission has a rule - commonly referred to as the “80/20” rule-that requires airlines to have 80% of their designated airport slots operating at all times or face losing those slots to another airline during an annual government assessment.

In simple words, airlines will have to continue operating flights on these designated routes even if there are 0 passengers on board. And it couldn't be more relevant in recent times with the Covid pandemic hitting hard on aviation- plummeting travel demands have made it all the worse.

This has already resulted in a loss of 113 billion dollars from the airline's industry. Before this, the industry was growing at a skyrocketing pace with the capacity offered by over 200 airports worldwide. Even then it wasn't enough for all the airlines to accommodate their aircraft upon their will and need. Simply because of a lack of proper infrastructure, limited space, and low availability of runways.

Here's a brief on how actually airlines schedule their operations around the world.

Airports globally are fragmented into slots with each slot valid on a specific weekday for a limited time. These are allotted to a certain plane of an airline, to take advantage of the full range of airport infrastructure necessary to arrive or depart. Under existing European regulations, the airlines must continue to run at least 80% of their allocated slots, or risk losing them to the competitor. The Federal Aviation Administration of the United States, or the FAA, also enforces a similar type of regulation.

NBC News

What happens when a passenger load on a plane is below par or close to nil?  The airline exchange or give away the take-off slot to another airline, for some price, or for free. This enables the airline to retain its given slots in the long run- a process known as "slot resale" or "slot sitting". And quite understandably, none of the airlines wants the slot of another airline. Thereby, for airlines, the loss from running ghost flights is much less than what they will endure, on losing their timeslots

The passenger-less “ghost flights” are a huge expense on the airline and for the environment as well. Reportedly, these ghost flights burn five gallons of jet fuel per mile and emit one ton of carbon dioxide for every two empty seats and that's a significant figure when it comes to carbon emissions- the aviation industry accounts for about 3% of worldwide carbon emission.

After widespread concerns about airlines' financial losses and the impact of emissions on the climate, on March 10, 2020, the European Commission temporarily lifted the ''ghost flight'' rule. Likewise, the FAA has suspended its requirement that airlines use their slots 80% of the time at U.S. airports.

Another possible reason could be to avoid checks. If an aircraft has been parked for a long time, it will have to be checked for airworthiness before it can be flown again. Therefore some airlines fly their aircraft up every few days just to say they have flown. The first wave of the pandemic saw innumerable aircrafts grounded around the world. This is one cheaper way than having all aircraft inspected once the travel bans are lifted.

FlightGlobal

 Long-haul routes and major airlines, in particular, are feeling the crunch of decreased demand. The IATA projects long-haul EU bookings at just 20% of 2019 levels.

Did you know? A Ghost Plane could also probably mean an aircraft in flight which, due to an event that has incapacitated the crew (usually uncontrolled decompression), flies on its last input heading on autopilot until it runs out of fuel and crashes. Or it could also refer to a ''rendition'' aircraft used by national governments to move prisoners internationally.

SOURCE(s)

COVER: Dianora Tintl

Alliance Air, a subsidiary of Air India, has issued a tender to repair its entire fleet of 18 ATR 72 aircraft.

After Air India's successful sale to the Tata Group in October 2021, to be handed over to the conglomerate in the first half of 2022. Alliance Air will remain with the Centre.

As accessed by PTI, Alliance Air's tender, the winning bidder will have to refurbish the cargo net, seat cushion repair, seat cover back and bottom, arm handle, floorboard, seat belts, along with the buckle, tray table, and latch. The tender stated that several other elements such as engine cover, propeller strap, arm cap rest, interior cabin fabric, pitot cover, and small and large curtains have to be refurbished by the vendor.

Airline refurbishing 18 ATR-72 aircraft

According to the tender, Carpet replacement will be required once a year on each aircraft. The tender, which was issued last week, stated that central carpet replacement would have to be carried out every three months or on the conditional requirement on each aircraft.

The service provider is required to carry out carpet cutting as per approved drawing, edge binding beading laying and fixing of carpet in aircraft, as required by the engineering department. Interested bidders will have to submit their technical bids. After approval, they can file the final financial bidding documents.

Alliance Air operates a fleet of 18 ATR 72 aircraft to 48 odd cities in India. Each of these planes has around 70-72 seats.

Alliance Air ATR-72 Aircraft

Ahmedabad, Agatti, Bareilly, Belagavi, Bengaluru, Bhavnagar, Bhubaneshwar, Bhuj, Bikaner, Bilaspur, Chandigarh, Dehradun, Delhi, Diu, Dharamshala, Dimapur, Goa, Gorakhpur, Guwahati, Hubballi, Hyderabad, Imphal, Jabalpur, Jagdalpur, Jaipur, Jammu, Jharsuguda, Kalaburagi, Kandla, Kochi, Kolhapur, Kolkata, Kullu, Lilabari, Lucknow, Ludhiana, Mangaluru, Mumbai, Mysuru, Nashik, Pantnagar, Pasighat, Pathankot, Prayagraj, Pune, Raipur, Tezpur are among the current operational destinations in India.

The flight schedule of Alliance Air is structured to enable easy connections to/from smaller cities via the hubs of Delhi, Kolkata, Mumbai, Bengaluru, Hyderabad. Alliance Air provides connections to International stations through its hubs and supports RCS-UDAN. Alliance Air operates a fleet of 18 ATR planes made an operating profit of INR 65.09 crores in FY20 and a net loss of INR 201 crores during the period.

The government on 8 October 2021 announced that salt-to-software conglomerate Tata's have won the bid to acquire debt-laden national carrier Air India for INR 18,000 crores. This includes a cash payment of INR 2,700 crores and taking over INR 15,300 crore debt. The deal, which is expected to be completed by December-end, also includes the sale of Air India Express and ground handling arm AISATS. Alliance Air despite being a subsidiary of Air India the decision to privatize is yet to be made.