Category Archives: Aviation

Healthy passenger load factors (PLFs) supported by a decline in competitive intensity due to moderation in capacity addition and suspension of operations of three regional airlines has augured well for the industry profitability. This coupled with a gradual improvement in the core growth drivers like economic environment, tourism demand and regulatory support and a strong demand during the peak season is expected to support the industry profitability during H2 FY2018. Improved tourism demand, policy measures like the National Civil Aviation Policy and the Regional Connectivity Scheme and start of economic revival are the key positives for the industry. However, inadequate aviation infrastructure, which has constrained the performance of airlines, remains a bottleneck. According to Kinjal Shah, Assistant Vice President & Co-Head – Corporate Sector Ratings, ICRA, “The industry has done well to mitigate the impact of 8.7 per cent YOY increase in ATF prices during H1 FY2018. The increased ability of the airlines to pass on the costs to the customers due to reduced competitive intensity has resulted in an increase in the revenue per available seat kilometer (RASK)-cost per available seat kilometer (CASK) spread for the airlines, and the financial performance of most of the airlines improved during the current year.”

Calling it an unfortunate decision, Rajan Sehgal, Member—Managing Committee, TAAI, says, “The travel agents drive bulk business for the airlines and cutting commission is like cutting the long arm of the airline. It is very unfortunate that Jet Airways has announced to slash the basic commission given to travel agents. We will be meeting representatives from Jet Airways next week to have detailed discussions on the matter. We have taken the opinion of our members and will put the issues forward.”

Rajat Sawhney, Vice President, ADTOI, says, “It’s a worldwide strategy where all the airlines are aiming at zero per cent commission to agents and Jet Airways has followed suit. It is sad and unfortunate that though bulk of the sales is generated through travel agents, there is no incentive for them to sell their products. This is probably a unique example in business where channel partners are not given any incentive to sell their products. It is high time that agents act as advisors and sell experiences. They should sell packages under their own brand name and offer bundled products with hotels, airlines tickets, transfers, visa, sightseeing and F&B etc. The agents should discourage the selling of stand-alone products which anyway would not fetch them any revenue.”

Opposing the move, Jyoti Mayal, Honorary Secretary General, TAAI, said, “We, as TAAI, are against the move that Jet Airways has slashed the one per cent commission for the agents effective January 1, 2018. Regarding the transaction fee, we are requesting them that they fix the rate of this transaction fee between 3.5-5 per cent for everyone and also maintain web parity so that there is a level playing field for everyone. We are meeting Jet Airways in a couple of days to take this further and also discuss procedural changes related to the same and are hopeful that Jet airways will understand our thought process and support our fraternity.”

Slamming Jet Airways’ move to scrap agents’ commission, Chitra Bhatia, Gen. Secretary, OTOAI, said, “I don’t think one per cent commission for agents was a big deal for the airline. Airlines need to continue the commission and partner with travel agents. Commission is a bond between the agent and the airline which should not be discontinued. Airlines are now going directly to the customer, and ignoring the agents in between. However, it is important for both the parties to work together.”

Jet Airways is the latest airline to do away with the basic commission for IATA travel agents. The airline has sent official communication to travel agents across the country that they will not be paying them one per cent basic commission from January 1, 2018. The move comes in line with many international airlines also adopting the same route. Confirming the news, a senior airline official said that while the commission will not be there, agents can levy transaction fee of up to 3.5 per cent of the basic fare. They can also include fuel surcharge component in tickets. However, the news has aggrieved the agents, who believe that the move is not fair and the airline needs to relook at its decision.

Ethiopian Airlines and SKYTRAX certified Four Star Global Airline has launched a brand new mobile application, which encompasses mobile features to enhance customers’ travel experience with simplified options for flight booking and management. Tewolde GebreMariam, Group CEO, Ethiopian Airlines, remarks, “In the age of “the internet of things” and Artificial Intelligence, I am happy that our ‘mobility’ project is fast advancing which enabled us to announce to our esteemed customers that Ethiopian Mobile Application has gone live. The application is a critical piece of our overall strategy to bring our customers’ travel experience to another level by leveraging on information and communication technology. With this new application, customers will be able to use their mobile devices to book their flights, do their flight check-in, issue their boarding pass and self-board their flights, check the status of flight, get actual arrival and departure times of ET flights and remain informed throughout their journey in real-time.” Ethiopian customers will enjoy 10 per cent discount on all bookings made through the new mobile app.

Centre for Asia Pacific Aviation (CAPA) India has announced the dates for its annual meeting of aviation industry leaders with an interest in India. Now in its 14th year, the CAPA India Summit will be on January 30-31, 2018, in Mumbai. This year CAPA has added a third day dedicated to airports and airspace opportunities. Titled CAPA India Airport & Airspace Summit, this will be held on 1 February, 2018.  Part of the agenda is announcement of a series of strategic research reports by CAPA, including its annual outlook for Indian aviation in 2018-19. The association expects participation from every airline and airport operator in the country and an audience of close to 250 critical decision-makers from airlines, airports, investors and financiers, manufacturers and lessors, suppliers, travel companies and tourism boards.  

Gulf Air in partnership with VFS Global launched a Bahrain Tourist Visa Service exclusively for the airline’s passengers flying across its global network to Bahrain. Travellers with return tickets of Gulf Air can now conveniently apply for a visa to the Kingdom of Bahrain online via visa.gulfair.com or by visiting their local Gulf Air sales office with the necessary documents no more than 30 days prior to travel to submit their application. Captain Waleed Abdul Hameed Al Alawi, Deputy Chief Executive Officer, Gulf Air said, “We are delighted to launch the Bahrain Tourist Visa Service, making the process of obtaining a visa to enter Bahrain easier. We anticipate positive feedback from our customers and look forward to welcoming more people from around the world to Bahrain to experience all that the Kingdom has to offer.” Vinay Malhotra, COO – Middle East & South Asia, VFS Global said, “The dedicated online platform not only makes applying for a visa to Bahrain quicker and more convenient than ever before, but also provides passengers with 24×7 accessibility and online tracking of their visas.”  

Air India is reportedly going to involve its core aviation assets packaged with low-cost subsidiary Air India Express and AI-SATS for sale as part of its disinvestment process. Apart from that the non-core assets, which includes Air India building in Mumbai and other offices, will not be a part of the sale but part of the special purpose vehicle (SPV). Core aviation assets include aircraft, slots at airports and flying rights to various countries. Both Air India Express and AI-SATS are profit-making subsidiaries of Air India. The other Air India arms — profit-making Air India Air Transport Services and loss-making Air India Engineering Services — will be sold separately. The SPV will include Air India’s non-aircraft debt as well as non-core assets. Source: Economic Times