Tag Archives: Indigo

Shady players, aviation scam and the boom and bust of airlines in India

Lalit Shastri

The fate of now closed Kingfisher Airline, Air India’s huge debt burden and the latest grounding of Jet Airways raises several burning questions.

The merger of Indian Airlines with Air India and the reckless acquisition of aircraft by these airlines ahead of their merger and many related issues has put the former Union Civil Aviation Minister Praful Patel and many bureaucrats connected with civil aviation under the scanner of the Central Bureau of Investigation (CBI).

The probe by the principal investigating agency will eventually lead to the prosecution of those prima facie guilty but even as the enquiry against the “unnamed accused” is on, one should not lose track of the fact that the previous Congress regime, led by Manmohan Singh, was at the centre of the huge aviation scam.

  • Sunil Arora, now Chief Election Commissioner of India, after enjoying his tenure as Chairman/Managing Director Indian Airlines, kept quiet for long and before returning to his parent cadre, apparently to save his skin, wrote a letter to the Government alleging the Civil Aviation Minister’s interference.  In his letter, he had underscored that the then Civil Aviation Minister Praful Patel was forcing the airline Board to take financially unviable decisions. Arora had alleged that he was under immense pressure to comply with the Minister’s orders.
  • Arora was CMD Indian Airlines between 2002 and 2005. He also served as a joint secretary in the Ministry of Civil Aviation from 1999 to 2002
  • Syed Nasim Ahmad Zaidi was Election Commissioner of India from 2012 to 2015 and Chief Election Commissioner of India from 2015 till 2017. Earlier, he was Secretary in the Ministry of Civil Aviation and Director General of Civil Aviation. He was also in the International Civil Aviation Organization (‘ICAO’) for four years as resident Permanent Representative of India on the ICAO Governing council.
  • Along with other directors of Jet Airways, Zaidi presided over the grounding of the cash starved airline
  • Another ex-bureaucrat also a director in Jet Airways is Ashok Chawla. He was Secretary in key ministries of the Government of India, including Finance, Economic Affairs & Civil Aviation. He also served on the Boards of the Reserve Bank of India and the Insurance Regulatory and Development Authority. He has at different points in time, been India’s Executive Director on the International Fund for Agricultural Development and Alternate Governor for India at the World Bank & Asian Development Bank.
  • Vishwapati Trivedi, former Union Secretary, was Chairman-cum-Managing Director of Indian Airlines. He became joint MD of the new company after the merger of Indian Airlines with Air India. His stint (2006-2008) was cut short in the midst of allegations of corruption linked to upgradation of the airlines’ product portfolio in 2007. Trivedi also raked in huge incentive payouts and a large number of first or business class passages. When it came to drawing huge performance linked incentives, Trivedi was in league with a couple of other bureaucrats who have headed the airline.

Indian airlines which was a state monopoly went down when VP Singh grounded all A320s for a year-and-half after the Bangalore crash. This was compounded when Praful Patel merged Indian Airlines with the profitable Air India to ensure both nose-dived and Jet and Indigo benefited. The low fares came on low cost airlines and were at break even point. Of course the unsustainable North-East routes were compulsory. Air India now sits on a debt of about Rs. 40000 crores.

To understand the genesis of the decline, one would have to zoom in and take a closer look at the controversial decision that had been taken to bypass the letter of intent that had already been issued to procure Boeing aircraft for Indian Airlines and shift the choice of aircraft leading to the A320 purchase agreement at the initiative of Prime Minister Rajiv Gandhi in June 1989.

When Indian Airlines was in utter mess with the grounding of A320s in 1990 in the wake of the Bangalore crash, Naresh Goyal took advantage of the Open Skies Policy of Government of India to set up Jet Airways to offer scheduled air services on domestic sectors in India. Jet Airways commenced commercial operations on May 5, 1993.

Goyal had taken full advantage of the Government of India policy that allowed foreign direct investment in the airline sector and when Jet Airways was at the take off stage in 1994, 60 per cent of its shares were with Goyal while the remaining 40 per cent were held equally by Gulf Air and Kuwait Airways. After establishing his airline, Goyal managed to waive off all competition obviously by pulling strings at the Government of India level to alter the policy to bar foreign airline investment in any domestic carrier. This was not difficult for him considering his close association with top Congress leaders. Consequently no airline could take the same route as Jet Airways to establish itself. It is an entirely a different matter that even Jet Airways had to offload the foreign stakeholders when the GoI policy had been changed but by this time his airline had already established itself and there was no competition on the horizon till 2012 when the Indian Government took the decision to allow 49 per cent holding in a domestic carrier by a foreign airline and 100 per cent by an NRI.

This was the period when the airline sector was being treated as the grazing ground for politicians and bureaucrats. The trend continues even to this day.

The moment Praful Patel became the Civil Aviation Minister in 2004, during UPA-I led by Manmohan Singh, he had spearheaded the decision to merge the two airlines – Air India and Indian Airlines – and gave a huge order to purchase aircraft – both to Boeing as well as Airbus.

Of the eight Boeing 777-200LR acquired by Air India after Patel took over, five of these grossly under-utilised aircraft were sold to Etihad Airways for $336.5 million in December 2013 as a part of the “financial restructuring” exercise. After the Comptroller and Auditor General of India slammed the national carrier for selling the aircraft at a loss and below the market price, Air India took the defence that the indicative sale price was not available.

The merger of the two Public sector airlines has been criticised continuously by those in knowledgeable circles as one profit making airline was merged with a loss making airline. The propelling idea behind this decision was that there would be a common infrastructure. In the end, neither the personnel policies, nor the engineering policies or the routes matrix gelled and nothing worked.

On 11 January 2006, Air India announced an order for 68 jets – 8 Boeing 777-200LR, 15 Boeing 777-300ER, 18 Boeing 737-800 and 27 Boeing 787-8 Dreamliners. After the merger in 2007, Air India inducted the biggest member of the A320 family, the A321, to operate mainly on international short haul and medium haul routes. Simultaneously, Air India also leased the Airbus A330s to operate on medium-long haul international routes (ref: wikipedia).

There is another big question: When the loss making Indian Airlines could be merged with Air India, why Kingfisher, an airline with 100 aircraft that was flying both on domestic and important international routes, was allowed to collapse? This airline was going bad mainly because of Aviation Turbine Fuel (ATF) prices and global recession. The government could have taken over Kingfisher, removed Vijay Mallya as chairman and merged it with Air India – given the fact that so many jobs and what not was involved. Air India was having only about half of the total fleet of aircraft that was at Kingfisher’s disposal.

While the previous UPA Government allowed Kingfisher to collapse, it went whole hog to save Jet Airways by closing down Air India’s lucrative international routes to favour Jet Airways. Even the time slot on the domestic sectors were allegedly approved to favour private carriers. According to insiders, all this was done at the behest of Praful Patel, known in political circles as the “Maharaja of Gondia”.

Praful Patel got Arvind Jadhav- a 1978 batch IAS officer, as CMD Air India in 2009. He was known to be a blue-eyed boy of RV Deshpande, Minister for Large and Medium Industries of Karnataka. Deshpande and Patel are related.

During the corresponding period (August 2003 to 8 June 2009), high-profile bureaucrat, Rajesh Kumar Singh was initially Director and then joint Secretary in the Civil Aviation Ministry. At the Joint secretary stage, he took premature retirement from the IAS and opted for a lucrative assignment with a commercial airline. Here one can’t help questioning how bureaucrats who have held important posts in the Civil Aviation Ministry are given waivers to join the very airlines they had official dealing with.

The dust raised by the merger of the national carriers, has led to the registration of a series of FIRs by the CBI. The first case has been registered under Section 120-B read with 420 of Indian Penal Code and Section 13(2) read with 13(1)(d) of Prevention of Corruption Act, 1988 against Air India, “unknown” officials of Union Ministry of Civil Aviation and others to investigate the allegations relating to purchase of 111 aircraft for national airlines costing about Rs. 70,000 crore to benefit foreign aircraft manufactures. Such a purchase caused an alleged financial loss to the already stressed national carriers.

The second case has been registered under Section 120-B read with 420 of PC and Section 13(2) read with 13(1)(d) of PC Act, 1988 against “unknown” officials of Ministry of Civil Aviation, NACIL, Air India and private companies and unknown others to investigate the allegations of leasing of large number of aircraft without due consideration, proper route study and marketing or price strategy. It was also alleged that the aircraft were leased even while aircraft acquisition programme was going on.

The third case has been registered under Section 120-B read with 420 of IPC and Section 13(2) read with 13(1)(d) of PC Act, 1988 against “unknown” officials of Ministry of Civil Aviation, National Aviation Company of India Ltd. (NACIL) – the entity formed by the merger of Air India and Indian, Air India and other unknown private persons and companies to investigate the allegations for giving up profit making routes and profit making timings of Air India in favour of national and international private airlines causing a huge loss to the national carrier.

A Preliminary Enquiry has also been registered against unknown officials of Ministry of Civil Aviation and unknown others to enquire into the allegations relating to the issue of merger of the two national carriers -Air India and Indian Airlines – causing loss to the national exchequer.

Corporate lobbyist Deepak Talwar, who was extradited from Dubai on 30 January 2019 along with Dubai-based businessman Rajeev Saxena, was brokering aviation sector deals for his foreign clients during the UPA regime. It is alleged that he received kickbacks in his Singapore based company Asiafield Limited from Emirates, Qatar Airways and Air Arabia. During investigation into cases registered by the CBI, he may spill the beans that would expose the role of bureaucrats and politicians in the aviation scam that has plagued the airlines in India.

On the grounding of Jet Airways, AIR India CMD Ashwini Lohani has said:

“The closure of Jet even if temporarily is definitely a setback to Indian aviation. It is indeed a sad day for all those in the business of flying in the country to witness a fine airline closing shop. While sustained mismanagement definitely contributed, the fact remains that in the entire aviation eco-system, it is the airline that invariably remains at the receiving end while all other stakeholders make money. We have in the past witnessed many airlines shutting shop and it is time to appreciate that the razor thin margins which airlines are forced to operate with in a competitive environment, results in a scenario that encourages unsustainability. The issue has no easy solutions, yet a solution would need to be found.”

Lohani is right in saying “Airline operations world over is a razor thin business”. Riding piggy back on this razor thin business is the Government, especially through GST, the oil marketing companies, the airport authority, service providers and the airline honchos, they all stand to gain.

In order to make an airline a successful business proposition, you have to work with cost cutting, aviation Turbine Fuel should be declared as goods and airlines allowed to import ATF. What needs to be noted is that ATF is not under GST and each state levies huge taxes, cess etc in addition to central excise duties, making it very costly. User development fees should be rationalized, operational slots and routes given equitably and rationally.

Lohani, despite his close links at the top government level that has helped him get a second stint as CMD Air India, too has not done anything for policy. As far as mismanagement goes, private and government airlines’ management has had great perks, it siphoned off money into promoter or politicians’ pockets while letting airlines collapse. Air India is no exception to this rule. It gave up lucrative routes, operated politically sponsored routes, bungled in fleet acquisition etc. Air India could have become asset light and nimble which it did not. Jet operated in shady back rooms and milked the banks much like Kingfisher but Naresh Goyal got away giving controls into the hands of the SBI Chairman and the consortium of lenders to seal the bidding process for Jet Airways. Goel rejected offers from Tatas, Delta and Indigo that entailed his stepping down. His not doing so and his mismanagement led to jet’s downfall.

Also read: Audit reveals how the aviation sector has been mismanaged and exploited in India

Mega science projects: India poised to join league of global scientific leaders

Dr T V Venkateswaran

New Delhi: Shedding its hesitant and cautious approach of the past with regard to participating in global mega science projects, India has taken bold steps in recent years to join international scientific quests.

The Science Technology and Innovation policy of 2013 envisages positioning India among the top five global scientific powers by 2020. In addition to home-grown science and engineering projects, the policy advocated participation in global science projects arguing that as a civilised country we must also participate in global mega science projects aiming to find out for example the ultimate structure of matter or the origin of the universe.

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Here are some of India’s Big Science initiatives:

Feeling the fabric of space-time: The detection of gravitational waves for the first time in February 2016 after a century of speculation and decades of tenacious attempts to improve sensitivity of instruments to detect these elusive waves, was hailed as the ‘discovery of the century’. Of over 1000 scientists from 15 countries who jointly made this discovery, 39 were from India. Indian scientists made direct contributions – ranging from designing algorithms used to analyse signals registered by detectors to ascertain those from a gravitational wave to working out parameters like estimating energy and power radiated during merger, orbital eccentricity and estimating the mass and spin of the final black hole and so on. Currently there are only two detectors in operation, both in America. Building on their strength, Indian astronomers are proposing to build the third detector somewhere in Maharashtra. Called Indian LIGO (IndiGO), the instrument matching the two LIGO observatories in the US would enable scientists to pinpoint the source of gravitational waves.

Big Bang: India became a full Associate Member of “God particle” fame CERN on January 16, 2017, thereby getting full access to data generated at the world’s largest particle physics laboratory. Currently, CERN has 22 member states. Indian scientists have helped build the Large Hadron Collider (LHC), the most powerful particle collider in the world as well as construction of two significant CERN experiments, CMS and ALICE. Incidentally CMS is one of the two experiments that discovered the Higgs Boson, popularly called as ‘God particle’ and ALICE creates conditions that existed at the time of big bang.

Digging deep: Shivajisagar lake was impounded in the Koyna region in Maharashtra to create an artificial reservoir in 1962. The massive earthquake of magnitude 6.3 that occurred in 1967 brought to light dangers of Reservoir Triggered Seismicity (RTS). Since its construction, the region has witnessed 22 earthquakes exceeding magnitude 5, 200 exceeding magnitude 4 and several thousand smaller earthquakes. Indian geophysicists have drilled a seven-km deep borehole in this earthquake zone and have established an on-the-spot observatory to study earthquakes. The observatory is studying physical and mechanical properties of rocks before, during and after a quake; physical and chemical changes in the earth’s crust that occur during an earthquake; and temperature change that impels melting of rocks. Geologists are hopeful that the knowledge garnered from the web of 15 earthquake sensors and the on-spot data collection, has potential for making earthquake forecasts possible in future.

Making of atoms: India is part of the international Facility for Antiproton and Ion Research (FAIR) coming up at Darmstadt, Germany for studying the building blocks of matter and the evolution of the Universe. This sophisticated accelerator complex will use high-energy, precisely-tailored ion beams to mimic the conditions inside the core of stars and early phase of the universe.

The 1.2-billion euro facility will study the structure of matter and the evolution of the universe since the Big Bang. While the Helium and hydrogen was formed in the early universe, rest of the elements it is postulated were cooked inside the stars. The facility would also shed light on the creation of heavy elements in stars and also the interiors of planets. Indian institutions will be engaged in building NUSTAR (Nuclear Structure, Astrophysics and Reactions), CBM (Compressed Baryonic Matter) and PANDA (Antiproton Annihilation at Darmstadt) in addition to building equipment to be used at the heart of the FAIR accelerator.

Looking back in time: India has joined nine other nations to build the world’s largest and most sensitive radio telescope – Square Kilometre Array (SKA). It will combine signals received from thousands of small parabolic and dipole antennas spread over a distance of several thousand kilometres across Africa and Australia. Karoo desert in South Africa will host the core of the 350 megahertz to 14 gigahertz mid-frequency dish array while the Australian telescope will observe lower-frequency scale, from 50 to 350 megahertz and the total detection area of the receiver dishes would exceed 1 square kilometre. A large number of dipole antennas are capable of receiving very low frequencies while the 3000 odd parabolic antennas operate at higher frequencies. Combining signals from all these thousands of antennas would simulate a single giant radio telescope with extremely high sensitivity. The sensitivity of this radio telescope would be fifty times more than any other radio telescope and it will be able to survey the sky 10,000 times faster enabling astronomers to even capture faint radio signals emitted by cosmic sources billions of light years away from Earth. With such a powerful telescope, astronomers could peer deep into the universe, way back in time when the first stars were emerging.

Shining like Sun: The International-Thermonuclear-Experimental-Reactor (ITER) has embarked upon an ambitious project to build a little bit of Sun in laboratory conduction. While the conventional nuclear reactor breaks a heavy atom like plutonium to gather the binding energy, the fusion reactor will fuse two light elements like say hydrogen into helium to harness the energy. As fusion reactors will not use any radioactive materials, yet generate immense energy, it is considered as a clean-green source of energy. The high temperature in the core of the stars results in light elements becoming highly ionised and attain plasma state. It is in this plasma state that two or more light elements could fuse. If we have to re-create such a condition on Earth, then we need to make a small amount of hydrogen into plasma before we can achieve fusion. One of the challenges is to contain high temperature plasma in a confinement to achieve the fusion. The experimental nuclear fusion reactor being built at Cadarache in south of France hopes to harness fusion reaction to generate energy. European Union, United States, Japan, China, Russia, South Korea and India are jointly building and operating this test facility. Institute for Plasma Research, Ahmedabad is contributing crucial parts of the tokamak reactor’s gigantic cryostat.

Predicting rain: The India Meteorological Department (IMD) is developing a dynamic weather prediction model involving 3D mathematical simulation of the atmosphere on computer and to test variations of dynamic models to ferret out the best ones for operational forecast of rainfall. While the ultimate goal is to get operational weather forecasts at a horizontal resolution of 12 km, by 2019 National Monsoon Mission will provide block level weather forecast. With the improvements in forecast, 24-hour track and intensity forecast error of the tropical cyclones reduced from 141 km to 97 km and ‘landfall error’ from 99 km to 56 km during 2006 to 2015. The accurate forecast of the recent cyclones, Phailin, HudHud and Vardah saved thousands of human lives.

Churning the sea: Using research vessel, Gaveshani, Indian researchers had collected samples of poly metallic nodules from Arabian Sea in 1981 and India was given a pioneer area for exploration of deep sea minerals in the Central Indian Ocean Basin in 1987. Subsequently extensive surveys were carried out leading to allocation of an area of 150,000 sq km with exclusive rights under the UN Law of the sea. India has access to an area of 75,000 sq km with an estimated resource of about 100 million tons of strategic metals such copper, nickel, cobalt besides manganese and iron. As various national institutions have developed technologies for extraction of metals from the minerals, soon India would establish First Generation Mine-site (FGM) with an area of 18,000 sq km and harvest natural resources from the sea-bed. The multi-purpose deep ocean mission would also try to harness deep ocean energy, deep sea fishing along with deep sea mining. Further technologies for sea water desalination to obtain potable water would also be undertaken.

Looking deep: The Thirty Meter Telescope (TMT), world’s advanced ground based telescope, is expected to outsmart all ground-based telescopes once it is operational. Made of 492 individual segments, the telescope mirror would have a reflective diameter of 30 meters and would be 81 times more powerful than any other telescope. It a partnership project involving CalTech, Universities of California, Canada, Japan, China and India. While initial location chosen was Hawaii, Hanle in Ladakh was also considered as an alternative. However, it may perhaps be finally located in Chile. Building of such a massive telescope is a technological challenge. The mirror segments have to be aligned precisely with each other and the adoptive optics proposed would eliminate the twinkling effect caused by atmospheric thermal disturbances. India will develop and manufacture 15% of the mirror segments and assembly.

Reaching for stars: India had dazzled the world by reaching Mars in very first attempt. Indian spacecraft reached the moon before that. Currently AstroSAT a multi wavelength space telescope is operational. ISRO in coming years would add many more deep space missions to its credit. Chandrayan 2- with a lander and rover is proposed to be launched some time inn 2018-19. A mission to study the Sun – Aditya, is in the offing. Building upon the success of the Mars Orbiter Mission, ISRO is planning to send yet another spacecraft to study Mars. Indian space programme in addition to providing telecom, weather, navigational services, would also take a pride of place among the spacefaring nations of the world.

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Technological spinoffs of mega projects such as LHC or FAIR are immense. Technology developed in CERN went into making mammograms used for breast cancer detection, while the positron used in particle physics experiments gave us PET (Positron Emission Tomography). The study of fundamental particles is sure to yield newer imaging technologies. That’s why it is important to invest in mega science projects. (India Science Wire)


Dr T V Venkateswaran, Twitter handle: @TVVen

 

Domestic airlines register 23.17% growth in passenger traffic during 2016; Air India lags behind IndiGo and Jet Airways in market share

Newsroom24x7 Staff

aviation-sector-in-indiaNew Delhi: Domestic airlines in India registered a growth of 23.17% in passengers carried between January and September this year compared to the corresponding period last year.

Passengers carried by domestic airlines during Jan-Sept 2016 were 726.98 lakh as against 590.21 lakh during the corresponding period of 2015.

paxIn terms of Passenger Load Factor, Spicejet was on top during the two successive months – August (93.2%) and September (93.5) this year. Go Air was second with a pax load factor of 86% and 89.4%, Air Asia was third with a PLF of 83.3% and 82.8% and IndiGo was fourth with a PLF of 82.1% and 82.1% and close on heels in the fifth place was Jet Airways with PLF of 81.7% and 79.9% during this period. Air India, the national carrier performed way behind with a PLF of 77.7% and 79% in comparison with Spicejet.

pax-load-factor

When it comes to market share of scheduled domestic airlines during the year 2016, IndiGo was on top commanding a market share of 37%, 38.4% and 39.9% respectively during the three quarters this year. Air India was third in this respect behind Jet Airways.

market-share

During September 2016, a total of 728 passenger related complaints had been received by the scheduled domestic airlines. The number of complaints per 10,000 passengers carried for the month of September 2016 has been 0.9. The maximum passenger related complaints have been received by Air India (Domestic) and Jet Airways + Jetlite airline.

The airline-wise details are as follows:

passenger-complains

On-Time Performance (OTP) of scheduled domestic airlines has been computed for four metro airports viz. Bangalore, Delhi, Hyderabad and Mumbai. Vistara is ranked at the first place when it comes to on time performance with 89.6 OTP%, followed by Spicejet (88.8%) and Indigo (87.7%)

Airline-wise OTP at four metro airports for the month of Sept 2016 is as follows:

otp


Based on Report released by the Ministry of Civil Aviation on 19 October 2016.

Click here for the performance of domestic airlines for the year 2016

Air India receives maximum passenger related complaints during Jan 2016

Lalit Shastri

Indigo with a market share of 27.26 per cent and Jet Airways with a market share of 14.32 per cent, are ahead of Air India, which commanded 12.23 per cent of the market share of scheduled domestic airlines in January 2016

air india
Photo courtesy wikipedia

During January 2016, a total of 823 passenger related complaints had been
received by the scheduled domestic airlines–the maximum by Air India in the domestic sector. The number of complaints per 10,000 passengers carried for the month of January 2016 has been 1.1.

The airline-wise details are as follows:

passenger complaints

Passenger complaints 2

 

Comparison of passenger load factors of various scheduled domestic airlines in Jan 2016 shows that in the case of Air India it went up from 81.7 per cent in December 2015 to 86.7 per cent in January 2016 whereas spicejet maintained a PLF of 92.1 per cent in December 2015 as well as January this year. In the same period the PLF of Jet was 82.5 and 83.8 while the PLF of Go Air was 84.9 and 86.5 in the same period.

Vistara, which received the least number of passenger complaints in January also tops the chart when it comes to on time performance (OTP) at four metro airports in the country

on time performanceOn-Time Performance (OTP) of scheduled domestic airlines has been computed
for four metro airports viz. Bangalore, Delhi, Hyderabad and Mumbai. Airline-wise OTP
at four metro airports for the month of January 2016 is as follows:

Due to extreme professionalism, the scheduled airlines in the domestic sector together carried most of the domestic passengers in January this year. In terms of total domestic passengers carried by the scheduled airlines, the percentage share of Air India is 16 per cent while that of the private carriers, it is 84 per cent.

If one takes into consideration the month-wise seat factor (passenger load factor in percentage) of scheduled airlines operating the domestic sector in India for January 2016, Spice Jet is on top with 92.1 per cent followed by Go Air, 84.9, Indigo 84.7, Air Costa, 84, Air Pagasus, 83.8, True Jet 83.4, Jet Airways and Jet Lite 82.5, Air Asia 81.9, and at the bottom are Air India with 81.7 per cent and Vistara with 74.8 per cent.

market shareIndigo with a market share of 27.26 per cent and Jet Airways with a market share of 14.32 per cent, are ahead of Air India, which commanded just 12.23 per cent of the market share of scheduled domestic airlines in January 2016

Passengers carried by domestic airlines during Jan 2016 were 76.55 lakhs as
against 62.45 lakhs during the corresponding period of previous year thereby registering a growth of 22.58%