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Air India News -- Part 16
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Jaysit
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PostPosted: Tue Feb 16, 2010 11:33 am    Post subject: Reply with quote

What on earth is a "seven-star" hotel?

I thought the term was one invented by the tacky Dubai-wallahs when they erected the Burj Hotel and wanted those with no taste to somehow believe that Dubai's "chikna" hotels are better than, say, the much more muted Peninsula in Hong Kong. In any case, its a completely meaningless term, one used only by nouveau riche Arabs, Sindhis and Gujjus when they want to impress someone (usually other nouveau riche Arabs, Sindhis and Gujjus). I guess its now also used by some of the more clueless among India's press corps. as well as Dalits.
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AKLDELNonstop
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PostPosted: Tue Feb 16, 2010 12:09 pm    Post subject: Reply with quote

I don't think the article on pilot training on simulator serves any purpose. I would be worried (about safety) if AI didn't pay for that.

Also, I do not think hiring three foreign consultants are going to make a difference for AI. All they need is common sense and

1) Consistency in product
2) Consistency in routes
3) Modernization of their useless website
4) Trimming all the accumulated fat
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Nimish
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PostPosted: Tue Feb 16, 2010 10:38 pm    Post subject: Reply with quote

Jaysit wrote:
What on earth is a "seven-star" hotel?

-


http://en.wikipedia.org/wiki/Star_%28classification%29#Seven_star_hotels
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karatecatman
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PostPosted: Wed Feb 17, 2010 11:41 am    Post subject: Reply with quote

LIVEMINT
Air India loses lease deal for three aircraft to Jet Airways
The deal, however, is at a lower rate than Jet’s previous agreement with Gulf Air, which is returning the aircraft after deciding against extending its lease deal
P.R. Sanjai

Mumbai: National flag carrier Air India has lost a lease deal for three wide-body aircraft to rival Jet Airways (India) Ltd, two people familiar with the deal said.
Royal Brunei Airlines, which had been in talks with state-run National Aviation Co. of India Ltd (Nacil) earlier, has agreed to take the lease of three Boeing 777 planes from Jet Airways, said a senior executive at Air India, the country’s biggest by passengers flown.
The deal, however, is at a lower rate than Jet’s previous agreement with Gulf Air, which is returning the aircraft after deciding against extending its lease deal.
“Though Jet Airways could not manage to get the same rates they got from Gulf Air, the carrier has managed to strike a decent deal,” said an aircraft consultant close to the development.
Both the executive and the consultant did not want to be identified.
Boeing Co.’s 777 planes are used for long-haul routes and can seat up to 440 passengers.
A spokeswoman for Jet Airways said the deal with Royal Brunei Airlines it yet to be finalized.
“We have four Boeing 777 planes which we have leased out, and, in the next one or two weeks, we will finalize the lease-out plan for three more Boeing 777 aircraft,” said K.G. Vishwanath, vice-president (commercial strategy and investor relations), Jet Airways.
An email sent to Royal Brunei did not elicit response.
Air India is changing its strategy after it didn’t get a good response for its six Boeing 777 aircraft.
“We have now put the tender into an open-tender mode,” the Air India executive said. “Any interested party can pitch in for taking the plane on lease without any time frame. If the rates match, we will consider the proposal.”
During the economic downturn last year, India’s airlines found it difficult to fill large aircraft and froze expansions in some long-haul international routes, choosing instead to lease their big aircraft for some extra revenue.
That hasn’t been easy.
Jet Airways, too, has not been able to lease its wide-body Airbus SAS-made A330 planes for more than a year, after saying last January that it was looking to sell and lease back at least one of the 11 A330 aircraft in its fleet to raise money to meet operational costs.
On Tuesday, Jet said it would begin daily non-stop flights from Mumbai to Johannesburg from 14 April using A330 aircraft, which can seat up to 300 people.
Kingfisher Airlines Ltd, India’s second largest carrier, has been more successful in selling or leasing its large planes.
In 2008, the airline sold three of its five wide-body Airbus A340 planes, which have a seating capacity of up to 300 people each, to Nigeria’s Arik Air for an undisclosed sum.
Typically, an airline earns $2-2.2 million (around Rs9-10 crore) a month on leasing a wide-body aircraft, including maintenance. Without maintenance, the rate is $1-1.2 million a month.
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PostPosted: Wed Feb 17, 2010 12:22 pm    Post subject: Reply with quote

MONEYCONTROL
No homework done by govt in AI-IA merger: Sitaram Yechuri
Feb 16, 2010

CNBC-TV18

The national carrier Air India has been in the midst of a desperate fight for survival. But many experts believe problems were exacerbated by the merger between Air India and Indian Airlines.

In an interview with CNBC-TV18, CPI-M Politburo Member Sitaram Yechuri spoke about the state of the parliamentary report on Air India and Indian Airlines merger.

Here is a verbatim transcript of the interview. Also watch the accompanying video.



Q: Parliamentary report on Air India and Indian Airlines merger, where do things actually stand?

A: We have all supported the merger and we continue to support. But right at that time we said that synergizing these two big companies and workforces, a lot of homework needed to be done and I am afraid that homework was not done.

Q: So you are still in favor of the merger? Because there were reports that the Parliamentary standing committee is not in favour of merger but actually it would want a demerger?
A: What we are saying is that it has not been thought through and no homework was done and ad hoc decisions and knee-jerk reactions and that caused the company and the country much more damage. So bring those people accountable and correct those things and we have said even for the time being, if you are not able to synergize these organizations, then have a holding company as Nalco.

Let them function independently for some time, do this homework and then you affect the merger. But without doing the homework a merger cannot happen. You will only be mounting your losses further because of your irrational decisions.
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karatecatman
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PostPosted: Wed Feb 17, 2010 10:46 pm    Post subject: Reply with quote

AI pilots lose jobs as Boeing freighters phased out

Press Trust of India
Mumbai
February 17, 2010
As national carrier Air India plans to phase out Boeing 747-400 and A-310 freighters, several pilots flying these aircraft, are also on their way out.

Sources today said, Air India has already terminated the service contracts of 30 senior most commanders flying these planes and many more are on the chopping block.

"The service contract of 30 pilots have been terminated effective from February 18," they said.

Sources said, the airline has served a month's notice to these pilots in January, saying that their services were no longer required by the national air carrier.

Air India currently has six Boeing 747-400 and two A-310 cargo carriers in its fleet.

Recently it leased out two another A-310 freighters to Delhi-based cargo airline, Aryan Cargo.



This may not be true as Air India is actively considering reviving its cargo division on April. This si also after it got an ward from emerging cargo airline.

The plan for the jumbos also is around possibly 3 aircraft which will be used for VIP and domestic duties. AI plans to use the jumbos on regional and domestic routes.
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PostPosted: Wed Feb 17, 2010 10:47 pm    Post subject: Reply with quote

Govt likely to consider Rs800cr equity infusion in AI

STAFF WRITER
New Delhi, Feb 17 (PTI) The government is likely to consider infusion of Rs 800 crore as equity in the cash- strapped Air India tomorrow, but wants the airline to take "extraordinary" measures to achieve a financial turnaround.

The Union Cabinet, which is slated to meet here tomorrow, is likely to take up the issue, informed sources said. A note on the matter has already been circulated by the Civil Aviation Ministry for the cabinet's consideration.

The cabinet is also likely to consider some aviation infrastructure projects tomorrow, they said.

While the government had earlier approved equity infusion of Rs 800 crore in Air India, the Group of Ministers (GoM) headed by Finance Minister Pranab Mukherjee, which met earlier this month, has not taken any final decision on the issue of another tranche of equity of Rs 1,200 crore.
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Jaysit
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PostPosted: Wed Feb 17, 2010 11:09 pm    Post subject: Reply with quote

Nimish wrote:
Jaysit wrote:
What on earth is a "seven-star" hotel?

-


http://en.wikipedia.org/wiki/Star_%28classification%29#Seven_star_hotels


As I said, puffery to the max.
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Caliguy
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PostPosted: Wed Feb 17, 2010 11:32 pm    Post subject: Reply with quote

For some reason I can't figure out how to quote but from the gov committee as mentioned above
"Let them function independently for some time, do this homework and then you affect the merger. But without doing the homework a merger cannot happen. You will only be mounting your losses further because of your irrational decisions."

How does letting them function independently until homework is done help losses??? You will only lose more money. After all AI and IA have done some rationalization (I said some) in using the right aircraft size on routes and staffing. Why not say expedite the process of rationalization. For instance you don't need any homework done to know that there is no need for AI to operate a B737 and IA to operate a A320 on the same route 15 minutes apart. Oh look they just saved money.

this committee is a joke and AI and IA employees should be embarrassed that these types of things even happen after the merger. Work together, merge the two companies and be done with it. If there are legitimate concerns that the right staff is not promoted or aircraft used then voice it. But if both sides agree that an AI 737 should fly to DXB from TRV while a IA A321 flies to DXB from BOM then so be it. That's life.
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PostPosted: Thu Feb 18, 2010 10:52 am    Post subject: Reply with quote

ECONOMIC TIMES
Senior officials desert Air India in hour of crisis
18 Feb 2010
Nirbhay Kumar,
ET Bureau

NEW DELHI: Troubled national carrier Air India, which is on life support provided by the government in the form of temporary financial assistance,
is staring at a serious manpower crisis with close to a dozen senior officials quitting in the last few months.

Faced with a flat or declining career path and possible salary cuts, several top executives of the debt-ridden carrier have opted for the airline’s voluntary retirement scheme (VRS). Several other executives have gone on long leave citing various reasons.
Executives directors P Senthil Kumar, DJ Chibber and HS Grover have quit Air India since the the present Air India CMD Arvind Jadhav took charge in May last year. Officials who are on leave for months include Anita Mitroo and Manjira Khurana.

The company currently has 26 EDs 75 GMs agaist sanctioned strength of 43 and 109, respectively. “There have been a large number of premature exits in the company. The management’s decision to cut performance-linked incentives (PLI) of EDs and functional directors have left people demotivated,” said an airline official.

The Air India management headed by chairman Arvind Jadhav had proposed a cut in PLIs of top company directors. While the payment of PLIs has been withheld for some time with a final decision on incentives is still pending. “You can not expect people to work in a salary band of Rs 35,000 to Rs 45,000 (in case PLI is withdrawn) after putting in 30 years of service,” the official said, requesting anonymity.

The airline introduced a VRS scheme last year for non-technical personnel besides offering its 32,000 staff the option of leave without pay in its bid to cut cost. As against 105-120 employess per aircraft in case of private carriers Air India has an aircraft manpower ratio of 1:230.

Government-owned National Aviation Company of India (Nacil) that runs the airline needs to cut costs by Rs1,991 crore by March to get Rs 2,000 crore from the government as the first tranche of the equity infusion. It is seeking an equity infusion of Rs5,000 crore by the government to boost its debt-raising capacity.

While two BSE-listed private carriers Jet Airways and SpiceJet have reported profit of Rs 105 and Rs 109 crores respectively in the lst quarter, profitability for Air India is still a distant dream. The airline posted a loss of Rs 1473.85 crore in October-December 2009 compared with Rs 1632.23 crore during the corresponding period the previous year.

Air India’s management, which is looking for salary cut, says the average salary of Air India staff is 15-20% higher compared with their counterparts in rival carriers Jet Airways and Kingfisher. While the same is true in case of technical and operational categories such as pilots and engineers, non-technical executives draw a much lower salary.

Faced with an accumulated loss of more than Rs 8,000 crore as on December 2009 the national carrier has sought a bail-out from the government.

While the government has already provided temporary financial relief to the airline, it wants Air India to take tougher decisions to cut cost. The airline’s decision to cut the salaries of senior pilots last year met with strong resistance with pilots taking medical leave en masse to disrupt the airline’s operations.
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PostPosted: Thu Feb 18, 2010 2:18 pm    Post subject: Reply with quote

Sent through Air India

February 18, 2010

Government approves equity support of Rs. 800 crores to NACIL


The Government today has approved the proposal for release of equity support of Rs.800 crores in two equal monthly installments to National Aviation Company of India Limited (NACIL). This equity infusion had earlier been approved by the GoM headed by the Finance Minister. The release of funds will be calibrated to the achievement of milestones laid down by the Group of Ministers (GoM).

NACIL is currently facing severe financial losses which is compounded by its costly legacy assets, weakening revenue stream and high cost structure, resulting in rising liabilities. Upon the directions of the Government, NACIL initiated a multi-pronged turnaround plan which included the following measures:

· Complete rationalization of manpower and productivity linked incentive.

· Complete the integration process of erstwhile Indian Airlines & Air India.

· Review of all agreements on technical & operational matters.

· Return of leased aircraft at the earliest.

· Large-scale redeployment of staff to curb infructuous expenditure.

· Closure of all overseas offices where NACIL does not operate.



After the financial restructuring and other turnaround measures adopted by NACIL, the GoM had accepted the company’s savings and cost reduction plan of Rs.1911 crores for the financial year 2009-10.



NACIL has initiated action as part of the Turnaround Plan along with cost reduction/revenue enhancement programme focusing on Fleet rationalization, Route Profitability, Manpower Rationalisation and Structural Changes. Fleet Rationalisation is being attempted through reduction of fleet size from 146 aircraft to 105 by March, 2011. 22 aircraft are being removed from the fleet by way of leasing out, return of leased aircraft and sale of aircraft. It has been estimated that this will result in annual cost savings of Rs.200 crores on maintenance and inventory cost and Rs.400 crores in fuel consumption and efficiency gains. Future requirement of cockpit, cabin crew and engineers would get reduced, resulting in annual savings of Rs.300 crores.



Route Rationalisation has been reworked for Winter Schedule 2009 (upto March 2010). Restructuring of operations over Frankfurt Hub (effective December 2009), capacity adjustments, rationalization of overlap operations of NACIL(I) and Air India Express, reduction of positioning flights and 6 B747 to be taken out and replaced by other aircraft will result in expected savings of Rs.563 crores in the current year. Medium term network strategy by end of December, 2009 is being worked out with the assistance of M/s. Simat Helliesen & Eichner. Inc consultants that will focus on profitable hub operations, leveraging partners for efficiency like DIAL T3 and Star Alliance. Manpower rationalization (including staff-related costs) is being attempted as an immediate, short-term and a long-term exercise which is expected to result in annual savings of Rs.113 crores, once implemented in full.


NACIL has shown improvements in its operational and financial parameters during the first half of financial year 2009-10 in comparison to the corresponding period of financial year 2008-09. The passenger load factor, which indicates the utilization of Available Seat Kilometer offered by the Company, has improved from 57.7% to 62%. The number of Revenue Passengers carried increased from 5.32 million to 5.61 million. As for financial performance, its operating loss of Rs.2029 crores was about 23% less as compared to Rs.2638 crores for the corresponding period of last year.


NACIL’s present paid up equity capital of Rs.145 crores is not sufficient for an aviation company of its size. The equity induction will not only ease the cash flow situation of the company but would also preclude borrowing from the markets at a high cost. The turnaround/restructuring plan of NACIL will be monitored and reviewed by Ministry of Civil Aviation, COS and GOM periodically.

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con spirito
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PostPosted: Fri Feb 19, 2010 10:42 pm    Post subject: Reply with quote

AI to reduce fleet 28% as condition of government bailout

http://atwonline.com/news/story.html?storyID=19444

Quote:
The Indian government yesterday announced final approval of an INR8 billion ($173.7 million) equity infusion into Air India parent National Aviation Co. of India, with the release of the funds "calibrated to the achievement of milestones laid down by the [cabinet]" including a 28% fleet reduction.

The government said the equity "would not only ease the cash flow situation of the company but would also preclude borrowings from the markets at a high cost." AI lost INR14.74 billion in its fiscal third quarter ended Dec. 31 (ATWOnline, Jan. 2Cool and "is currently facing severe financial losses. . . compounded by its costly legacy assets, weakening revenue stream and high cost structure." It said AI's operating loss through the fiscal first half was INR2.03 billion. The government said the airline has agreed to a INR19.11 billion cost reduction program for the year ending March 31.

In addition, it will reduce its fleet from 146 aircraft to 105 by March 2011. Twenty-two already have been pegged for departure through lease, sale or their return to a lessor, which will result in annual savings of INR2 billion in maintenance and inventory costs, INR4 billion in fuel costs and "efficiency gains" and INR3 billion in employment expenses. Additional manpower reductions will save INR1.13 billion.

Another INR5.63 billion will be saved this year through route rationalization, a reduction of overlap between AI and Air India Express and of positioning flights and replacement of six 747s. The government said AI's network "will focus on profitable hub operations, leveraging partners for efficiency like [Delhi's new Terminal 3] and Star Alliance." The INR8 billion in funding will occur in two installments of INR4 billion each.

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PostPosted: Sat Feb 20, 2010 9:16 am    Post subject: Reply with quote

DNA
Air India board meet to weigh spinoffs today
Sindhu Bhattacharya
DNA
February 20, 2010

New Delhi: A crucial meeting of the board of directors of Air India is scheduled for today where, in all likelihood, a long pending proposal to spin off the airline related businesses into separate subsidiaries would be taken up.
The business of acquiring and operating aircraft would remain with the holding company.

Some months back, the top management of Air India had mooted a plan to set up five strategic business units (SBUs) which would ultimately be spun off into separate subsidiaries and thus independent profit centres.

These were low-cost operation of AI Express, the cargo airline, MRO (for components and airframe), ground handling and related businesses.

As per this plan, the cargo airline SBU is headed by Anita Khurana, component MRO by Vipin K Sharma, airframe MRO by K Unni, ground handling by A K Sharma and related businesses by Amod Sharma.

The AI Express operation is being handled by a general manager whereas the SBU plan envisaged continuance of Arvind Jadhav as the chairman and MD of Air India, the airline.

Though this plan has been operational internally, the modalities of spinning off SBUs into separate subsidiaries would be discussed at tomorrow’s meeting.

Sources point out that though such a spinoff may provide benefits, issues such as service tax, royalties etc could become fresh cost heads and need to be looked into.

If the spinoff plan is approved, it may also help the airline in managing its mammoth employee strength better.
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karatecatman
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PostPosted: Sun Feb 21, 2010 1:23 am    Post subject: Reply with quote

TIMES OF INDIA
Poor record? AI must pay for fuel upfront
Saurabh Sinha
TNN, Feb 21, 2010


NEW DELHI: Financially crippled Air India-Indian Airlines combine has come within a whisker of having its aircraft grounded from next week due to non-payment of jet fuel dues. With arrears mounting to Rs 2,000 crore, oil marketing companies (OMCs) have threatened to put the airline on cash-and-carry from Tuesday, which means AI pays upfront for getting tanked up and fly, something that the cash-starved airline simply can’t do.

To avoid getting grounded, the board of the merged entity, National Aviation Company of India Ltd (NACIL), met here on Saturday and enhanced working capital limit (amount a company is authorized to borrow from banks to meet daily operational costs like fuel, wages and airport charges to remain functional) by a whopping Rs 1,000 crore. Now, AI’s working capital limit has been enhanced from Rs 17,000 crore to Rs 18,000 crore.

Essentially, this means NACIL will be able to borrow another Rs 1,000 crore and tell OMCs that it will clear the dues. Most importantly, it now hopes to retain its credit period of three months and avoid being put on cash-and-carry. While banks shy away from giving loans to business houses in doldrums, AI’s state-owned status gives them the comfort of government backing for eventual repayment. ‘‘Threats of being put on cash-and-carry are routine to get money. One state-owned company can’t do this to another government concern,’’ said a senior official.

Oil companies say NACIL has not paid for jet fuel purchased since last July and the figure is now close to Rs 2,000 crore. A senior AI official claimed OMCs give better discounts to other airlines and the three-month credit period given to AI means an extra cost of Rs 400 per kilolitre per month to the national carrier. ‘‘OMCs adopt differential pricing for airlines. They give us lower level of discount to offset the higher credit period. We used to make advance payment till July 2008. From last July to date, we have cleared about Rs 800 crore of older dues,’’ the official said.

However, highly placed government officials said AI is just sinking deeper into debt by the day, from which it may be very difficult to come out, and viewed this latest enhancement of working capital limit as yet another sign of that. ‘‘The recent approval to have Rs 800 crore equity infusion into NACIL this fiscal is too little, too late. There’s talk that it may get another Rs 1,200 crore next fiscal subject to a number of conditions. But if AI is to stay afloat, it needs a massive fund infusion shortly. Otherwise, its curtains for the Maharaja,’’ said a top official.
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PostPosted: Sun Feb 21, 2010 3:07 pm    Post subject: Reply with quote

ECONOMIC TIMES
NACIL in talks for IT platform to integrate flight codes
21 Feb 2010
PTI

MUMBAI: Global air transport communication and IT solutions provider SITA is in advanced stages of discussion with NACIL to provide the much-needed IT platform for integrating flight codes of Air India and erstwhile Indian Airlines into a common one, sources said.

Apart from its benefits in the sale of tickets, a common code is an essential requirement for the national carrier, which joining a global airlines' alliance-- Star Alliance.

National Aviation Company of India Ltd (NACIL) had earlier invited global tenders for providing, implementing and maintaining a Passenger Services System (PSS) for the airline on a turnkey basis.

"The negotiations (for providing PSS system) are in advanced stages but nothing has been finalised so far," sources close to the development told PTI here.

The two parties, however, are expected to conclude the discussions shortly, they said.

SITA provides hosted PSS services to 140 airlines, carrying an estimated 120 million passengers across the world.

Following the merger with Indian Airlines, Air India is in the process of integrating activities that cover product delivery, passenger handling and sales and marketing functions.

The activities include reservations and ticketing, pre and post flight processes and frequent flier programme among others.

The biggest obstacle for Air India in becoming a part of the Star Alliance is the absence of a single flight code between Air India and Indian Airlines. At present, the international and domestic services of the merged carrier continue to operate under two different codes AI and IC.

The Parliamentary Committee on Transport, Tourism, Culture headed by CPI(M) Rajya Sabha MP Sitaram Yechury, in its recent report, had recommended that the process should be implemented without further delay.

"The Committee notes with dismay that NACIL took almost two years to start the process by inviting Request for Proposal for revamping the commercial processes and systems and infrastructure yet the integration of Passenger Service Systems (PSS) still remains a far cry," the report said.

It also observed that until NACIL gets a common IT platform, a meaningful business transformation would be difficult to achieve.

The Committee recommended that NACIL should strive to achieve a common IT platform without delay and before finalising any Commercial Transformation Project "as the success of the latter is closely linked with the former," the report said.
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PostPosted: Sun Feb 21, 2010 3:11 pm    Post subject: Reply with quote

After F**king 2.5 years are AI and IC just thinking about doing it?
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PostPosted: Tue Feb 23, 2010 7:00 am    Post subject: Reply with quote

New Delhi, February 22, 2010


President Pratibha Patil’s address to Parliament
Honourable Members,


1. My greetings to you as you assemble here today for the first session of both Houses of Parliament in the new decade. I am confident that all members would dedicate themselves to making this decade a glorious period in our country's march to prosperity and to its rightful place in the comity of nations. A heavy legislative agenda awaits you, which merits your careful attention.

...


46. The Civil Aviation sector could not remain unaffected by the global slowdown. Our national carrier, Air India, was particularly badly hit. Steps are being taken for its early rehabilitation under the careful guidance of a Group of Ministers.



We have taken decisive strides towards reaching these goals. Still, much remains to be done. The road is long, but our journey is in progress. Let us march together with confidence to a new, bright future.



Jai Hind.

JAI HIND.
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PostPosted: Tue Feb 23, 2010 8:14 pm    Post subject: Reply with quote

PLI payments for AI top brass restored
STAFF WRITER

New Delhi, Feb 23 (PTI) The government today restored the payment of productivity-linked incentives (PLI) to Air India's functional directors, five months after stopping it.

With losses mounting, the Air India Board had approved a cut of up to 50 per cent in the monthly PLI for the airline's executive directors and other functional directors in September last year, as part of cost-cutting measures.

Official sources confirmed that the Civil Aviation Ministry today wrote a letter to the Air India management directing it to restore the PLI payments to its functional directors.
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PostPosted: Wed Feb 24, 2010 12:12 am    Post subject: Reply with quote

Air India's first A320 ordered directly from Airbus is to be delivered shortly, as VT-EDE.


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PostPosted: Wed Feb 24, 2010 11:34 am    Post subject: Reply with quote

ECONOMIC TIMES
AI told to implement massive salary cuts even in face of unrest
24 Feb 2010
Nirbhay Kumar
ET Bureau

NEW DELHI: The government has asked loss-making Air India to carry out massive salary cuts even in the face of industrial unrest, while saying any financial assistance to the national carrier will be linked to a credible revival plan.

The group of ministers (GoM) set up last year to review Air India’s revival plan said the next round of equity infusion to the tune of Rs 1,200 crore would happen only after the successful conclusion of salary negotiations with trade unions, according to an official document in ET’s possession.

The troubled airline is seeking an equity infusion of Rs 5,000 crore by the government to boost its debt-raising capacity. The government has already given Rs 800 crore to the airline as temporary financial assistance.

The GoM, led by finance minister Pranab Mukherjee, wants the airline to bring the salaries at par with those in private sector rivals. Air India chairman and managing director Arvind Jadhav has called a meeting of employee unions on Thursday to negotiate wages.

The airline’s wage bill of over Rs 3,000 crore annually for about 31,000 employees is 17% of the airline’s total operating expenses. Air India’s management said the average salary of Air India staff is 15-20% higher compared with their counterparts in rival carriers Jet Airways and Kingfisher.

Mr Mukherjee said at the GoM meeting held on February 3 that no slippage in cost-cutting and revenue enhancement targets will be acceptable to the government. He has also asked the airline to present a credible revival plan before the Union cabinet at the earliest. The GoM is expected to review the airline’s cost-cutting exercise next month.

The trade unions said they are not against a wage rationalisation. “There should not be a fixed percentage cut across the board. Because of some in-built clauses in the performance-linked incentives (PLIs), salaries of some categories such as commercial and non-technical have come down by about Rs 5,000 in the past two years,” said VJ Deka, secretary of Aviation Industry Employees Guild (AIEG).

The employees had earlier agreed to take a PLI cut in the range of 15-35%, helping the airline to save around Rs 350 crore annually. But the management’s decision to reduce PLIs by half has forced the unions to take a tough stand on salary cut, said another union leader.

“We had agreed to a 15-35% cut with the committee set up to negotiate wages. We still don’t know where the 50% cut in PLIs came from,” he said, requesting anonymity. In November, the ministerial panel had asked Air India to save Rs 1,911 crore by the end of this fiscal. The airline has, however, said that it would be able to save only Rs 800 crore by March.

Air India is facing the worst financial crisis in its history and has sought financial help from the government to tide over the crisis. While it has tried to implement a slew of measures to bring down its overall cost structure the airline has largely failed to get desired result.

The airline has accumulated loss of over Rs 8,000 crore as of December 2009 mainly due to high fuel price and excess capacity in the market.

While two BSE-listed private carriers Jet Airways and SpiceJet have reported profit of Rs 105 crore and Rs 109 crore, respectively, in the last quarter, profitability for Air India is still a distant dream. The airline posted a loss of Rs 1,474 crore in October-December 2009 compared with Rs 1,632 crore in the corresponding period of the previous year.

The airline introduced a VRS scheme last year for non-technical personnel besides offering its 32,000 staff the option of leave without pay in its bid to cut cost. Air India has 230 employees per aircraft, compared with 105-120 in the case of private airlines.


This will again be reversed. Employees will once again go to Parliament, tap the "right sources" and things will go out of hand. It will be linked to the plight of the aam admi and the UPA will develop cold feet. Once again there will be the proclamation that Air India is a national treasure. Mr Yechury will once again hold forth.
About turn.
The same drama that gets repeated numerous times.

Politicians have to be held responsible for the current mess. The merger was totally unwarranted and will delay plans for *Alliance.
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PostPosted: Wed Feb 24, 2010 11:39 am    Post subject: Reply with quote

AI to connect Washington with India via Milan

STAFF WRITER

Washington, Feb 24 (PTI) India's national carrier Air India will soon launch daily flights between Washington and Indian cities with a stopover in Milan.

The decision to start a daily flight connecting Delhi amd Kolkata with Washington via Milan follows the successful launch of Air India's New Delhi-New York-Washington since December last year.

S Ghole, head of Air India operation in Washington, told PTI that all necessary clearance has been obtained from the authorities in the United States for the launch of its new service to India via Milan.

Milan has been chosen as a stopover, so as to attract the European traffic too. Details of the new flights are expected to be announced soon.

Once the flight to India via Milan is launched, Air India flights coming to Washington from New York would cease.

***

India’s national carrier Air India will soon launch daily flights between Washington and Indian cities with a stopover in Milan.

The decision to start a daily flight connecting Delhi amd Kolkata with Washington via Milan follows the successful launch of Air India’s New Delhi—New York—Washington since December last year.

S Ghole, head of Air India operation in Washington, told PTI that all necessary clearance has been obtained from the authorities in the United States for the launch of its new service to India via Milan.

Milan has been chosen as a stopover, so as to attract the European traffic too. Details of the new flights are expected to be announced soon.

Once the flight to India via Milan is launched, Air India flights coming to Washington from New York would cease.

Over the past one decade there has been an upsurge in Indian American population in Washington metropolitan area, with the current estimated population being about 300,000.

As of now, more than half a dozen airlines connect Washington with Indian cities with a daily traffic to India being around 600.

Air India is planning to tap into this growing segment and also the traffic between Washington and Europe through a stopover in Milan.



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PostPosted: Wed Feb 24, 2010 12:04 pm    Post subject: Reply with quote

IAD has been successful? Really? Or maybe the fact that they started the service is considered to be a success!

So now what brilliant new move are they planning?

DEL-JFK-IAD and DEL-MXP-IAD ?
or
DEL-JFK and DEL-JFK-IAD ?
or
Something else entirely?

And AI seem to know something that others don't. Because AZ couldn't make DEL-MXP or MXP-IAD work. And United can't get MXP-IAD to work either.

Oh so some flights will go via Frankfurt, some via London and some via Milan. And of course, most won't connect with each other (not much different from now, I suppose).
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avbuff
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PostPosted: Wed Feb 24, 2010 12:08 pm    Post subject: Reply with quote

jasepl wrote:
IAD has been successful? Really? Or maybe the fact that they started the service is considered to be a success!

So now what brilliant new move are they planning?

DEL-JFK-IAD and DEL-MXP-IAD ?
or
DEL-JFK and DEL-JFK-IAD ?


Oh come on! it is clearly stating that DEL - JFK & DEL - MXP - IAD will be operated.

Thankfully since yesterday we are hearing good moves by Indian carriers.
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jasepl
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PostPosted: Wed Feb 24, 2010 12:12 pm    Post subject: Reply with quote

avbuff wrote:
Oh come on! it is clearly stating that DEL - JFK & DEL - MXP - IAD will be operated.

It doesn't state anywhere that the JFK-IAD tag will be dropped. I presume it will be, but that's not clear.

So what happens now to the problem of the 77Ls sunning at Kennedy all day? Hopefully they finally realised that it probably cost less to pay the parking fees than to fly an empty 77L to Washington and back.
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PostPosted: Wed Feb 24, 2010 12:14 pm    Post subject: Reply with quote

Quote:
Once the flight to India via Milan is launched, Air India flights coming to Washington from New York would cease.


It's pretty clear in this sentence.
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jasepl
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PostPosted: Wed Feb 24, 2010 12:15 pm    Post subject: Reply with quote

avbuff wrote:
Quote:
Once the flight to India via Milan is launched, Air India flights coming to Washington from New York would cease.


It's pretty clear in this sentence.


Clearly I am blind!
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PostPosted: Wed Feb 24, 2010 12:21 pm    Post subject: Reply with quote

karatecatman wrote:
This will again be reversed. Employees will once again go to Parliament, tap the "right sources" and things will go out of hand. It will be linked to the plight of the aam admi and the UPA will develop cold feet. Once again there will be the proclamation that Air India is a national treasure. Mr Yechury will once again hold forth.

Amen. What is the solution ? On top of PM sits Signora. On top of her sits Didi, PP, Kalaignar, and a whole bunch of other "allies". It is so frustrating.

karatecatman wrote:
Politicians have to be held responsible for the current mess. The merger was totally unwarranted and will delay plans for *Alliance.
From my understanding after meeting with LH board member, *A, actually, wants the domestic part, the international part is added baggage. IMHO, having commenced the merger, GoI has to ram this through. It is like a festering wound and sometimes catharsis is the solution. Painfully in the short run but better in the long term.
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Spiderguy252
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PostPosted: Wed Feb 24, 2010 12:27 pm    Post subject: Reply with quote

The equipment will be a 77W right? Operating a 77L on DEL-MXP and MXP-IAD sounds crazy to me. But after all, this is AI who are flying the 77Ls on DEL-NRT and AMD-FRA. Confused
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avbuff
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PostPosted: Wed Feb 24, 2010 12:29 pm    Post subject: Reply with quote

Spiderguy252 wrote:
The equipment will be a 77W right? Operating a 77L on DEL-MXP and MXP-IAD sounds crazy to me. But after all, this is AI who are flying the 77Ls on DEL-NRT and AMD-FRA. Confused


AMD-FRA-EWR is a B77W; those B77Ls are used to NRT, CDG and LHR terminators.
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jasepl
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PostPosted: Wed Feb 24, 2010 12:30 pm    Post subject: Reply with quote

avbuff wrote:
Spiderguy252 wrote:
The equipment will be a 77W right? Operating a 77L on DEL-MXP and MXP-IAD sounds crazy to me. But after all, this is AI who are flying the 77Ls on DEL-NRT and AMD-FRA. Confused


AMD-FRA-EWR is a B77W; those B77Ls are used to NRT, CDG and LHR terminators.


Is the DEL-FRA still a 77L? They had announced that deployment some time ago.
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PostPosted: Wed Feb 24, 2010 12:39 pm    Post subject: Reply with quote

OH yes DEL - FRA as well, missed that one.
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Spiderguy252
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PostPosted: Wed Feb 24, 2010 12:42 pm    Post subject: Reply with quote

OK, seems like DEL-MXP-IAD will be a 77L as per the thread on A.net.
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bob1988
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PostPosted: Wed Feb 24, 2010 1:44 pm    Post subject: Reply with quote

Why MXP? Wouldn't a Star Alliance hub make more sense (well, not FRA due to costs and slot restrictions)?
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PostPosted: Wed Feb 24, 2010 6:40 pm    Post subject: Reply with quote

It seems like Air India has followed the DEL-MXP-IAD suggestion originally made by me last October Very Happy

http://airline-news.blogspot.com/2009/10/air-india-washington-problem.html
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PostPosted: Wed Feb 24, 2010 10:54 pm    Post subject: Reply with quote

Finally, AI is doing something quasi-sensible. Behramjee should write to them more often.

FRA is a wretched airport, even for LH transfers.

MXP? I don't know much about it. I guess after AZ's international operations fizzled out of MXP, they've been courting carriers left, right and center. Hope AI got a good deal, courtesy of Sonia Gandhi's pull if nothing else!

In any case, one can't really compare AI to AZ. AZ's cost of operations were/are much higher, and to be quite frank, AZ made AI look like SQ in comparison. I think that UA pulled out of MXP after LH launched Lufthansa-Italia.

So what's the story now?

BOM-Milan-ORD, DEL-Milan-IAD, ???-???-EWR. What about YYZ? Will that continue to go through LHR just to maintain slots there? And what about the JFK nonstops?

AZ has very few offerings out of MXP now. If AI tinker with their inflight product to make it more Italian-friendly (Italian food and wine options, IFE dubbed in Italian), they may have a winning product.
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PostPosted: Wed Feb 24, 2010 10:56 pm    Post subject: Reply with quote

bob1988 wrote:
Why MXP? Wouldn't a Star Alliance hub make more sense (well, not FRA due to costs and slot restrictions)?


I think Lufthansa Italy has plenty of connections from MXP.
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PostPosted: Thu Feb 25, 2010 8:42 am    Post subject: Reply with quote

I guess from MXP, AI will be counting on LH Italia for onward connections within EU, similar to 9W's dependence on Brussels airlines out of BRU.

And it's logical on AI'a part would be to move EWR & ORD flights from FRA to MXP. So, it can scissor its IAD, EWR & ORD flights at MXP with flights coming from BOM, DEL & AMD.

Folks, lets get used to the idea that MXP is a mini *A hub in the making (courtsey AI)!
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PostPosted: Thu Feb 25, 2010 9:13 am    Post subject: Reply with quote

I still don't get how MXP can be better than LHR and FRA. At least LHR and FRA have sizable O&D demand. Maybe AI should just wait for the new terminal at DEL to be done and then re-align their entire schedule to allow seamless connections there, avoiding European scissor hubs. 9W has already shown that secondary European cities don't serve as good hub locations. You can get to almost all the major European cities via DEL or BOM, so once connecting in DEL is easy then Secondary Indian City-DEL-Europe/USA/Asia should be a very viable routing.
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PostPosted: Thu Feb 25, 2010 9:40 am    Post subject: Reply with quote

ryder1650 wrote:
I still don't get how MXP can be better than LHR and FRA. At least LHR and FRA have sizable O&D demand. Maybe AI should just wait for the new terminal at DEL to be done and then re-align their entire schedule to allow seamless connections there, avoiding European scissor hubs. 9W has already shown that secondary European cities don't serve as good hub locations. You can get to almost all the major European cities via DEL or BOM, so once connecting in DEL is easy then Secondary Indian City-DEL-Europe/USA/Asia should be a very viable routing.


FRA is already served very well by LH, but Italy as a market is very underserved from India. In any case, the whole idea of a scissor hub isn't to carry O&D pax there, but to allow for seamless transfers across flights. Plus, I bet MXP gave AI a bargain given that its in need of long haul carriers after AZ dissolved its hub there.

Unless the bean counters have shown that a hub at MXP is cheaper to operate than non-stops from DEL using 77Ws and 77Ls, I think that avoiding expensive EU hubs is the way to go. The 77W can easily do DEL-ORD/JFK/YYZ nonstop. The 77Ls can be used for BOM-JFK/EWR nonstops and DEL-IAD nonstops 3-4 times weekly. All other Indian cities can connect to these flights at DEL and BOM.
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PostPosted: Thu Feb 25, 2010 11:45 am    Post subject: Reply with quote

ryder1650 wrote:
I still don't get how MXP can be better than LHR and FRA. At least LHR and FRA have sizable O&D demand. Maybe AI should just wait for the new terminal at DEL to be done and then re-align their entire schedule to allow seamless connections there, avoiding European scissor hubs. 9W has already shown that secondary European cities don't serve as good hub locations. You can get to almost all the major European cities via DEL or BOM, so once connecting in DEL is easy then Secondary Indian City-DEL-Europe/USA/Asia should be a very viable routing.


MXP is better then FRA/LHR because of the following obvious reasons.

* It is difficult to get desired slots at LHR/FRA for transatlantic connections.

* LHR/FRA already having another million flights going transatlantic

* Plus there is competition from rival carriers BA/LH/9W

* MXP as mentioned earlier is underserved an no India - MXP flights exist as of now.
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