The Short Sighted Indian players Part II

Its strange as well as disappointing to note that the second part of this topic is being written 4 years after the first part. Strange because a lot of things have happened in this period and disappointing because the airlines have still not fully understood the market and as well as what they want after all this.

As far as the Indian Aviation sector is concerned, there are two different markets.
a) The domestic and Short haul Middle east and South Asian market.
b) The long haul European, Far East and American market.
The dynamics of these two markets interact with each other in a unique manner considering the demography of India and the presence of international hubs around the Indian Subcontinent.

Let us take for example, the market (a). This market mainly consists of semi skilled laborers travelling from rural India and middle class tourists making their first international trips. That means Low Cost model is the new Model-T in town. This is ably catered by our own Indian LCCs like Indigo, Spicejet, AirIndia Express as well Air Asia, Tiger Airways, Air Arabia etc from all Tier-1  and Tier-2 cities. Apart from this full service carriers (Jet Airways Air India and foreign carriers) too take a significant upper middle class travellers and business travellers to these destinations.

Secondly, on the market (b), most of the European carriers and Cathay Pacific, Thai Airways, Singapore Airlines serve almost all major cities in India. Emirates, Qatar Airways and Etihad too form a very significant part that they should've been the first I mentioned. The uniqueness is with the 4 carriers namely Emirates, Qatar, Etihad and Singapore Airlines. These airlines cater to market (a) as well as market (b) significantly. They have established themselves so much in each of the categories that it will be difficult to pull market share from them in a short time span. It would require a lot of patience, significant upfront investment in new routes, and sustained marketing and service to establish yourself.

The two full service Indian carriers namely Jet Airways and Air India started on this path and left it halfway through. Jet Airways technically having run a scissor hub out of Brussels(something I always lauded) was a great idea to start with and what was required was sustained marketing and perseverance to see off the worst of economic crisis in 2008-10 period. What was required was a route rationalization on the North American side of operations starting with reducing 2 daily service to 1 to New York area and catering to other markets like Dallas/Chicago/West Coast. Code sharing a lot of american destinations would've helped its case. Instead it started leasing out its 777s and focused more on market (a). That is LCC dominated and has already been decimated enough. It started going into a cocoon. Jet Airways, you need to identify yourself first and decide whom you want to cater to. And I think 9W has somewhat answered that question by tying up with Etihad. By this Jet-Etihad deal, all 9W is trying to say is "mate, I am not brave enough to play for the long-haul, but if there is enough market I am ready to play your sidekick".

With respect to Air India, the less it is written about the better.  Having an Indian hub for long-haul routes is one of the worst decisions ever taken and yet this still ranks way better to its other decisions. The Indian long-haul market is neither dense nor voluminous. It is distributed among the major cities and those are less in numbers. Who will be mad to choose an avg 2 hr flight to DEL, complete immigration and  transfer to international for a 14 hr (for North America) or 8 hr (for Europe) flight when they can do all this from their own city for a much less time. Bringing the 787s would not solve the problem entirely. AI cannot always depend on home passengers to fill in seats if it has DEL in mind. It needs to go out there and fight. Its international services need to be synchronized with each other. DEL-LHR, DEL-MIL, DEL-FRA if synchronized with DEL-HKK, DEL-BKK DEL-SYD and sustained with quality service could turn out to be gamechanger with 787s. Air India's market would be partial India partial hub transfer passengers that's the way you live in the aviation industry.

Both the carriers need to understand that if they want to cater to the Indian international market, an Indian hub has no place in the scheme of things. And if you are expanding, better have the guts and patience to weather the storm. 

The gulf partner

Its been sometime since I got time to write here. There were couple of reasons for this. The Indian aviation sector was for the best part of last 3 years engaged in what can one only call as an elephant spilling mud on itself. Simply put, one can say commercial aviation in India just saw almost everything that could go wrong. Typical union fights, management problems, market share loss leading to near bankruptcy, non payment of bills and salaries, cutting of important routes to come out of red, problem of plenty, competition from international airlines in traditional routes.... almost everything.

The one thing that showed positive indication was Indigo. It is in its own world. Running profitably, setting footprint internationally, placing order for more short haul Airbus workhorses. It has done well in the medium term and I hope for god's sake it continues to do so in the long term as well.

One other thing, and its about this I am gonna talk here, that caught my eye was the Jet-Etihad deal. By the time I am writing this, Jet has already come out of the red, leased out its long haul aircrafts and cut down operations, started cost cuttings across the board and down the pyramid and most importantly in the verge of clinching a credible foreign investor who can very well turn out to be a long-term partner. The facts till now has been that negotiations have been held bilaterally between the Indian commerce ministry and Jet-Etihad representatives and already Jet has sold its Heathrow slots to Etihad for $70 million.

Now what does each side stands to gain from this?

From the Jet side, they have been severely hampered in their international operations as of now with the suspension of lucrative routes like JFK-BRU-JFK, MAA-KUL etc. Its 777s have been flying in Thai's liveries and its A-330s too are having downgraded operations. It is in some serious debt but has managed well till now, never defaulting a bill or paycheck. But in the process, it has lost market share and revenue. Now it wants to scale up. But to come out of this tempest it needs the capital as well as a reliable partner to grow with. Already Jet and Etihad have been code-sharing for sometime and with the gulf carrier's cash reserve, it is only natural that the two are looking for a partnership. All that Jet is looking for as of now is to reduce the debt and slowly consolidate domestically at a time when Kingfisher is slowly being taken off in a stretcher. When its long haul aircrafts are back, it must have enough working capital to restart its North atlantic routes.

From Etihad's side the math is much simpler. It is not getting anymore penetration into the tier-2 cities and the only way to gain those traffic and match Emirates is to partner with an Indian carrier. Cities like Trichy, Madurai, Vizag, Lucknow, Amritsar, Coimbatore, Chandigarh, Nagpur etc are looking desperately at a one stop connection to North America. Jet can easily feed them to Abu Dhabi and Etihad will carry allover the world. I wont be surprised if Jet moves its international hub from BRU to Abu Dhabi and restarts one of its LHR slot and EWR service from there. After all, both have enough markets from Indian pax to run in parallel with Etihad  .

All this means, Jet is in no mood to go big international in the short-term and  just consolidate its domestic market. It needs to be seen what are its own plans with respect to Indian metro cities and North american connections. 

Continuous modernisation: The mantra of Chennai Airport

When I first sat down to write on this topic it was the peak of recession all over the world.(I hope the worst has gone past) It wasn't the right time to appreciate the efforts of modernisation that was going on throughout the country's various airports when new Greenfield airports of Hyderabad and Bangalore were experiencing negative growth in air traffic in their first year of inception. But the operation of Chennai airport through the years was a successful and unique model by itself that I yielded to the temptation and here the interesting story unfolds before you.

First of all the greatest advantage that the airport has had right from the beginning was the availability of large tracts of land around it for expansion(At least till the turn of the century). First came the Meenambakam terminal that still continues to be part of the Cargo terminal at the airport. Then came the Kamaraj terminal and Anna Int'l terminal next to one another. This model was best suited for linear expansion for both domestic and international terminals. As int'l traffic increased Anna terminal was expanded further down to add three more aerobridges. The domestic apron was expanded to accommodate more narrow bodies without the requirement for expansion of the terminal itself. Both terminals were built for good capacity.

The highlight was better utilisation of available space. Chennai airport always experienced a steady growth or drop in traffic and never a drastic fluctuation. Innovative ideas which were never experimented at Mumbai or Delhi were used here. Traditional space plans were done away with and models that suited the needs of the situation were implemented. Also Chennai airport was the first to implement cross runway operations along with mumbai. Walkalators which were conceived for the new terminal at Delhi have been commissioned at Chennai airport at concourse level.

The concept of integrated terminal seems to have caught the fancy of everybody. All major airports that have been modernised or under modernisation are following this for better utilisation of space at air side as well as terminal side. Chennai airport on the other hand is going for separate expansion of domestic and international terminals. But it hasn't failed to understand the benefits of the other model. So the concourse level of both terminals of the airport have been connected with travelators for easy transit. This means domestic aircrafts can park at international terminal when it is empty but the passengers can reach the domestic terminal easily and vice-versa. This combines the advantages of both the terminal models.

Finally, Chennai airport has always undergone modular expansion and continues to do so linearly. This eliminates the need for sudden or drastic change in airport operations. It would be better if the air side was also expanded similarly like rapid exit taxiways etc.

The short sighted Indian players

When the Indian aviation boom started, many players jumped at the opportunity to grab a share of their pie. The market was studied extensively by various analysts and different business models came out. Each of them was successful in its own way during the early periods. Then as the industry began to consolidate, it underwent a lot of change and attained the first level of maturity.

A mixture of American kind of operations(in terms of routes and fleet) and the customer favoured low cost model turned out to be a model that was tailored for India. So everything was fine on the domestic arena.

At the same time the open skies policy opened up India for new foreign airlines. Code share agreements with domestic carriers helped both of them mutually. It was business time for airliners. Then came the blow. Who would have expected things to have such a rippling effect? The U.S sub prime crisis turned into the worst economic downturn the world's economies faced after the Great Depression of the last century. Pink slips and bankruptcy became household words. Airlines couldn't find passengers. To add to this, the oil prices rose to a new high which meant that it was much more costlier to fly a craft than it was earlier. And a couple of our own domestic players were overjoyed by the new found freedom-Authorisation to start international operations from DGCA after 5 years of golden domestic period. Here is where they failed miserably.

The international market was just recovering from the 9/11 epidemic and was growing. So others have already had an experience with such an aviation crisis. But to the new players it was a whole new world to play in. They went the grand way of opening into traditional international routes that kept the airlines' ledgers ringing. But the fact that these players failed to realise was that these routes were also running in full capacity. Any more addition would only lead to over capacity. The early success enjoyed by Jet Airways was followed by the economic downturn. The true picture came into view. Airlines worldwide were undergoing trimming and route rationalisation. Kingfisher opened with a service that was least favoured at the time. Mallya would have been wiser, had he delayed his international plans and concentrated on the ailing domestic sector. But things weren't as they were to be. Now all the three Indian international carriers are looking down the barrel.

So the first mistake that Kingfisher did was not to look back into its domestic operations. The liquor baron in his hurry to start international operations bought Air Deccan. Had it been mainly to consolidate Kingfisher's position, he wouldn't have changed the business model of it much. His idea of penetrating into deep inner markets of India was great but the method followed was not the best. If the Air Deccan or other LCC model was prevalent then Kingfisher would have garnered a huge market share. Jet Airways realised this and started the Jet Airways Konnect and expanded Jet lite to increase its domestic presence and to build its brand value while maintaining the regular Jet Airways service.

The second mistake was done by both the private carriers. This is regarding their international operations. Both started on traditional busy routes i.e from Bombay and New Delhi, to start on a strong note. But they were actually eating into a pie that was already shared by Air India and was shrinking. During the period of recession these airlines faced severe load factor problems and now the loss has been to all the three Indian carriers. They lacked innovation at the time when it was needed the most.

Kingfisher and Jet Airways with their domestic hubs at Bengaluru and Hyderabad had excellent opportunity to grow their international operations from these two places that they lost. Look at the opportunities. A diversified domestic network that can compliment the international arm. Two private greenfield airports that provided excellent infrastructure and could have made for ideal hubs. They didn't capitalise on these two core points. These are international airlines that are going to serve passengers whose either starting point or destination was India. So instead of catering to Indian needs you can't provide people with given limited options. With traditional hubs like Dubai, Kualalumpur, Singapore etc which have world class facilities a mere 3 hrs distant, Mumbai with its shanty airport would not make for an ideal international hub. One cannot become a truly international carrier like Cathay Pacific or Singapore Airlines overnight. An international transfer from Mumbai was already available from Air India for people . If alternate and nice locations were given, people would have had a wide range of options and everybody wouldn't be fighting for the same route. Jet Airways made a positive move in this direction by making Brussels as its international hub and connecting that to all major cities of India. But it couldn't expand much due to the recession.

In U.S also different carriers provide direct international connections from their hubs. Delta used to fly non-stop from Atlanta to Mumbai . Continental is flying from Chicago O-Hare to Mumbai. These do not fly from the traditional international gateway of New York-JFK. One needs to follow such a model to be successful. The sad thing about the whole issue is both the private carriers had a market in hand which they left out and went at Air India's. That was loss for all the three. Hope the carriers make the necessary changes before getting ready for a new and promising chapter which I hope is just round the corner.

Air India: The journey ahead

Through all these years the Maharaja was a symbol of royalty and luxury. Air India in the past had done well to use this as its mascot and has had some wonderful times up there in the sky. But almost a decade after the Open skies agreement and many other ups and downs in the global aviation industry, Air India now finds itself at the brink of bankruptcy. What could be the reasons? Let's see.

During the early days Air India had a monopoly over Indian Aviation. Though the govt was giving little support financially this indirect support led to the building of Brand Air India throughout the country as well as outside. So the market for Air India was high. Then as the domestic skies opened up, it saw the entry of private players into the arena. Initially Air India continued to dominate the Indian Aviation scene due to its wide network and experience. But soon as more and more domestic carriers especially LCCs came to the front it started losing. While Air India continued its age old model with its ageing flights the new carriers sporting a modern look and new aeroplanes attracted everybody. Right from customers to pilots and air hostesses and other staffs. The momentum was gone. The enthusiastic Air India's staff were no more, as either they moved to other airlines or were downtrodden at the benefits their counterparts were enjoying in other airlines. This brought down the operational efficiency as well as the services of the National carrier.

Also Air India failed to evolve with the changing market and economy. Before 1991 Mumbai and Delhi were the places were international traffic originated or ended. But then southern states opened up to brace the IT and manufacturing revolution that is still continuing. The private and foreign carriers grabbed the opportunity and built their brand value. Air India lost the race in the south. When Thai Airways, Singapore Airlines , Malaysian Airlines Cathay Pacific, Lufthansa, Air France and British Airways started direct services to Chennai from their hubs back home the south could not have asked for more. Air India continued expanding from its traditional hubs at Mumbai and to a lesser extent New Delhi. For an international airline, to expand services at its primary hub makes sense only if it caters to a large number of international transit passengers. But Air India serves basically for its nation and never had a thought of becoming an airline as British Airways or Singapore Airlines is. So it must have concentrated on other cities of India also.

This led to a cash crunch and it couldn't modernise its fleet as it was trying to realise its mistakes slowly. The only positive thing about Air India is it started the highly profitable Air India Express that has established its brand well in the region. Though it might be facing tough competition from emerging rivals I am sure it will continue to grow.

On the whole the govt and the management of Air India must realise that the carrier is not a charity service for the country as it could not live if it continues to do so. Air India is not like other PSUs. In other industries some kind of a law protecting the PSU could be made to increase the business of PSU. But the aviation sector is different. The people must be satisfied with the service to choose the airline. So a different kind of push is needed to revive the airline. These are:

1. Excess staff is a major problem with AI. One cannot easily give them a pink slip. The only way is to expand the Air India Express network to untapped markets from tier 2 cities like Trichy, Madurai, Jaipur etc. Let AI expand with its established brand initially. Then we can think of the main carrier.

2. Route rationalisation must be done to cash in on profitable routes and remove non profit making routes.

3. Throw away the old A300s and 310s or convert them to freighters and Cash in on an untapped high potential sector when it is in its nascent stage. Build Air India Cargo and expand it and modernise the passenger fleet.

4. Build the brand value of Air India in the domestic arena first. A good image in the domestic sector would automatically lead to a better position in the international market. Jet and Kingfisher have banked on their excellent domestic service when they started their international operations. If your own country people don't prefer you who else are you going to carry.

5. Last, after the above said points are accomplished there is a need to build a strong and dynamic management group that reacts to different market scenarios and thinks out of the box to grow.

So the current bailout is definitely needed from the govt but the management must ensure that these are utilised properly.

Going International: The Paramount way

With Paramount Airways at last announcing the purchase of ten A321s, we can see Chennai emerging as a hub for business class travellers in South Asia. This takes away people from the busy and congested hubs of Bombay, New Delhi and Colombo. 'Hassle free transfers through Chennai'. That might be the tag line for Paramount. Think of Paramount advertising "Fly to the Far East and Europe seamlessly through our hub at Chennai". Paramount has carefully examined and chosen its possible destinations. Untapped markets of Central Europe and Far East are being considered. That is a gutsy move. While most of the Indian carriers started their international services on traditional routes which has led to over capacity, Paramount wants to cater to the niche market. People from central Europe may transfer through Chennai for Far East destinations like Seoul, Shanghai, etc.

If things continue on a sound note one may expect a Paramount flight on the Kangaroo route via Chennai. Chennai being right on the middle of the Sydney-London route could provide a hassle free alternative from the traditional hubs at Dubai and Singapore. In future Paramount can think of its own terminal in Chennai on the lines of T3 at Dubai or T5 at LHR. Paramount's mantra of growing slow but steady is perfect for an all business class airline.

Being an all business airline has its own advantages and disadvantages. Since you will be catering to a small but regular traffic your customer base is steady but low. At times of turbulence this is useful. One can look at markets which do not have much of economy travellers.
Paramount has withstood the economic crisis in the domestic arena, while other carriers were struggling to survive. The U.S market has been shrewdly avoided for the time being considering the fact that it has still a long way to go before it recovers from the crisis. So it is those markets which are on the verge of recovering that Paramount is looking at. Lets wait and see how Paramount's Thiagarajan makes his international debut.

The implications of Deccan 360

I am personally surprised at the reception of Deccan 360 by the industry. Considering its potential and implications one might have expected a lot of hulla ballo similar to the Nano project. But may be its implications haven't yet been realised by many. So why am I so excited about this venture?

Because within a couple of years an industry which is 90% unorganised becomes a highly organised one. Capt. Gopinath threatens to remove half the trucks that ply on today's national highways. From then on one doesn't need to pack his house a week before and wait for a week after if he is shifting his home from Agartala to Mumbai. Trucker's strike would have little impact on commodities movement.

Airports like Salem, Tuticorin which have been closed due to unviability can expect huge revenues from Cargo handling as they are strategically located near large industrial clusters. Since Deccan plans to have international entry points at Delhi, Nagpur, Mumbai, Hyderabad and Chennai, customs clearance could be finished at these airports and be sent to other places as domestic cargo. So little infrastructure needed at these small airports. Overall revenue of all domestic airports would increase thus making their modernisation profitable. The low-cost model will make average exporter shift to air transport from land and rail transport.

The current model followed is a 3rd party logistics manager manages warehouses at various points across the country and mostly outsources the transportation part from transport companies. This leads to production delay in the manufacturing industry. But within half a decade one can do away with such a system. As soon as a batch of components is manufactured, it can be air transported to the customer company in a day or two.

Now after all this, the ground situation is, MIHAN is only partly ready. Chennai the second busiest cargo port in India is facing capacity constraints. Chennai being a manufacturing hub for many auto components and electronics in industry is the customer end of many cargo routes. Airports like Salem and Tuticorin are ready to receive the ATRs of Deccan 360 but not their cargo. A cargo terminal at each of these airport is essential and also needs to be adequately staffed.

Deccan has cleverly chosen its initial sectors. Let it prove its mettle in the high density sectors and then expand. Maybe there will be a day when the number of Deccan's parcel coaches outnumber the yester year's postal department's van. That is something like privatisation of postal dept!!!!

Deccan 360 The Indian avtar of Fed-Ex

Capt. G.R. Gopinath may first seem to be a man who takes heavy gambles in a volatile industry. But his past records speak volume about what he has in him. When Deccan first flew out of Bangalore only 1% of India's population was flying. Later when he sold it to Mallya it was 5%. Now his new brain child 'Deccan 360' dares to change supply chain and logistics scene in the country.

Within an year he plans to have a fleet of 9 planes and over 400 trucks criss crossing the country and abroad. A corporate logistics solution provider, end to end supply chain management and a swift and low cost courier and parcel service, all combined into one. This is what he has envisioned. Think of a parcel being sent from Jalandhar to Tuticorin within a day. This is what Gopinath is planning to achieve. With a hub at the geographically and therefore the govt favoured Nagpur MIHAN, that will serve as the hub for domestic network and a feeder point for international cargo, one can expect a reformed and competitive service from the logistics sector in the near future.

Jet Airways Konnect - following a once successful model

On May 7th 2009, the Indian aviation industry, which has witnessed everything from boom to crashes in the past, saw the emergence of another successful business model that is still followed in the U.S and Europe. The feeder and hub model. Under this model low density routes from major cities are served by a subsidiary which acts as a feeder for the mother airline. The mother airline operates on the high density routes. These subsidiaries act as a feeder service for the high density routes. For eg, if a passenger wants to travel from Coimbatore to Kolkata, he will take a Jet Konnect to Chennai from where a Kolkata bound Jet Airways flight would leave in twenty or thirty min. At the same time similar flights from other tier 2 cities like Trichy and Madurai will also arrive to connect with the Kolkata flight. Since only ATRs or other regional jets would be operated on these routes, the load factor would be high as well as the load factor on the mother Chennai - Kolkata flight would be high.

Similar model is already being followed by Paramount keeping Chennai as a hub, with the only difference being it operates all business class flights in all its routes. Though the time of introduction of such a service by Jet Airways is debatable, considering the position of Jet lite and the current economic scenario, this age old model has been highly successful in boom times. Seems like Naresh Goyal wants to consolidate his position further in the domestic sector, considering the current international scenario.

Chennai Airport expansion project

Work on the Rs. 2000 crore Chennai Airport expansion project has finally got off with the handover 130acres of land to the AAI. The land will be used for extending the secondary runway beyond the Adyar river. The project involves construction of a new Domestic Terminal, expansion of the International terminal, sprucing up the Cargo terminal and extension of the secondary runway. The new domestic terminal has been designed by a consortium of 4 firms including Hargreaves Associates, Frederic Schwartz firm and The Creative Group. The terminal has been designed to handle a capacity of 10 million passengers per annum. Hope the project will be finished in time to witness growth after the current economic slowdown that has led to a decrease in air travellers. Full news about the project can be read from the following link.

A google sketchup model of the new terminal created by me is pasted here. Type Chennai terminal and you will get it. It can also be viewed in Google Earth by zooming to the place.

Political pressure or Corporate Ethics

After more than half a decade of extravagant growth, the aviation sector is yielding to the World Economic Crisis. Suddenly the word 'pink slips' has become common. It was a matter of over capacity. The sky-rocketing oil prices added fuel to the fire. The American aviation sector saw huge amount of capacity cutting including retirement of some old workhorses from their fleet which weren't efficient. Older pilots got their retirement early.

In the Indian sector those carriers which were operating daily services to tier-2 and tier-3 cities started cutting their capacity even on the inter metro sectors. The two Private giants Kingfisher and Jet Airways who were on an international expansion mode put on hold, their plans as well as new contracts. But the term 'pink slips' never entered the Indian aviation sector. Except for a handful of old international pilots who were sacked(that was also following a DGCA notification on air safety) and the unsuccessful layoff drama by Jet, Indian aviation didn't see much.

Jet's layoff and the immediate backtracking by its chairman brings up to the table a long pending question that hasn't been answered yet. In case of a crisis situation, how will the Indian Corporate sector react? This is the first time that the private sector is facing such a deep crisis in our country. Before 1991, government policies insulated the bottom half of the employee pyramid from any such problems. But now, the private players, they have to decide upon the future of the company and its employees. Jet Airways followed the west's method but came under severe pressure from local political parties for it, and the concept of employees union entered the arena. Kingfisher and Air India were cautious enough to not take such drastic steps.

The corporate culture and ethics in India is quite different from the rest of the world. The Tatas and the Birlas stand as living example of what it is. The Indian players will be up against those who are ready to take desperate measures to see that their stocks remain in the green throughout the year. Back home the playing field is different. Other things like social responsibility, Employees welfare etc assume larger significance.

India is fast emerging as a super power in the region. Now its decisions will not only affect the Domestic industrial sector, but also to some extent, the region as a whole. Every move made by it will be watched from outside. With the private sector having a larger role to play, they must realize their responsibility. The next few years will be a testing time for it. How it deals with the crisis is going to determine its role and value, in India as well as in the global arena.

Infrastructure bottlenecks

While the Indian aviation sector continues to boom, the state of infrastructure of airports across the country is appalling. Long queues in check-in counters, customs, immigration and poor parking and access facilities present a dismal picture. On the air-side lack of adequate parking bays, inefficient ground handling facilities and long time for landing and take-off of aeroplanes are costing the companies dear. The pictures show the situation at various airports.

The first picture shows the situation on the taxiway of Mumbai Int'l airport. The modernisation drive being carried out at the airport is expected to decongest the airport and also be able to enhance its handling capacity. Modernisation of other metro's airports are under various stages of implementation. As for Bengaluru(Banglore) and Hyderabad they are getting new greenfield airports by next year. The state of the present airport is in the first picture.

Airbus A-380 is not the largest!!!

It would fascinate the reader to know that the Airbus A- 380 is not the largest of aircrafts presently. Very few people know about the Airbus Beluga and the Boeing Dreamcarrier which are actually more than 1.3 times the size of an A-380. It is mainly a transporter(used only for cargo puposes). The second picture is of a Beluga unloading a fuselage.

For example, Airbus is a consortium formed by a group of European nations. So the manufacture and the profits thus gained are shared among the countries. Hence, different parts of an aircraft are made in different countries and is finally moved to its Toulouse assembly plant, where the parts are assembled. In such cases these carriers are used to transport the fuselage and wings, which are bigger. It is for these purposes that a transporter is used.

If an Airbus Beluga could carry the fuselage(the central tube like part of an aircraft) of an Airbus A-380 consider its size. There are totally a five of them under operation eith Airbus and an equal number with Boeing. These days they also leased to other companies to transport combat aircrafts, helicopters, space station components and large machinery. If converted to a passenger aircraft(which has not yet been done) it can accomodate between 1800 to 2000 passengers over four floors(a nice substitute for trains).

Consolidation all the way

Industry sources state that the public can expect another merger. There are indications that Paramount Airways (which mainly caters to the southern region) is looking at Go Air (for picking up stake) to extend its presence in the western and northern region.

I'll keep the viewer updated on the Indian aviation sector from time to time and make a move from the economic sector to the technical sector.

Another merger!!!!!!!!!!!!!!!!!!!!!!!!!!

In my last post, it was stated that the Indian aviation industry was undergoing a phase of consolidation with announcements of major acquisitions and mergers. Well, it seems that this would continue. The recent announcement of taking 26% stake in Air Deccan by UB Holdings Chairman Mr. Vijay Mallya (better known as the liquor baron of India) has set alarm bells ringing among the other Indian players. It is seen as a strategic move by both the airlines, as they could share their infrastructure and ideas, play better in such a highly competitive sector and cut down costs on operation and business. This is not the end of the fairy tale of consolidation, as another player has already announced similar intentions. These would go a long way in the development and maturity of the sector.

Let us hope that the low cost carriers don't move away from the scene too early. It was because of them that the aviation sector has developed to this extent and I can fly to Bangalore and be back with a mere 500 bucks even today.

THE BIG FIGHT MOVES TO INDIA

The age old fight between the Airbus industrie and Boeing.Co seems to be a never ending one with the new battle field taking shape int the form of India. With the Open sky policy, the Indian aviation industry has seen a boom in the recent past(needless to say, unmatched by a stagnant physical infrastructure). The years 2003 and 2004 saw the emergence of many new low cost carriers. Though some of them still run on leased aircraft the market for planes grew tremendously.It all started with the state owned Air India entering into an agreement with Boeing to buy 50 and odd aeroplanes from the latter.

When Indigo airlines stated in a press release that it is going to buy 100 A-320s(a huge chunk) , Airbus realised that India is no more a penny market but has the potential to be its no. 1 market and soon started exploring the possibilities of setting up MRO(maintenance repair and overhaul)facilities in the country to attract more buyers. Kingfisher Airline's decision to buy 5 Airbus A-380s(the super jumbo) only came as a confirmation to the Airbus's idea. The end of 2005 saw the emergence of Jet Airways as a good player in the private sector which gave them the confidence to invest in a few birds from the Boeing.Co to extend its services to the gulf and the south east asian nations.

The year 2006 was a period of consolidation for the aviation industy seeing mergers, buyouts and public issues . The busy stalls of the Airbus and Boeing at the Aero India show clearly shows the intentions of the two rivals. But would the poor infrastructure at airports be able to keep up with the pace with which the industry is growing? With the cost of air turbine fuel increasing by the day, would the low cost carriers be able to sustain themselves in this highly competitive market? Well. The answers to these questions is definitely going to determine the future moves of the two airline manufacturers.

Well, anything happens in the future or not, currently a flight ticket to New Delhi seems to be far more cheaper than an AC train ticket. So live the present and enjoy as long as it is available to you(m not talking abt the 1Re tickets, surely not).