Airport slot allocation in India

Excerpts from Competition and Regulatory Deficit in Civil Aviation Sector in India by Mukesh Kacker (IAS) Director General.

• For airports managed by Airport Authority of India (AAI), the AAI allocates the slots. For private airports not managed by AAI, the slots are allocated by the concerned SPV in coordination with AAI.
• All domestic airlines who want to operate at an airport, file for the landing or take off slots with the Directorate General of Civil Aviation (DGCA) and the respective airport operators such as AAI, Air Force, Navy and SPV in Delhi, Mumbai, Bangalore, Hyderabad and Cochin airports.
• The slot requests are analysed vis-à-vis airport capacity parameters viz. runway, apron and terminal building. Based on the analysis, all airport operators either approve the slots in respect of the airports or generate a list of alternate offers. These approved and offered slots are discussed in a meeting where all the airlines, DGCA, BCAS (Bureau of Civil Aviation Security) and airport operators are present. After the meeting, the approved slots are conveyed to DGCA for approval of the flight schedule
• Slots are allocated twice a year, for summer season and winter season, where each season is a period for six months.
• Allocation of slots is based on (i) “Grandfather Rights” and (ii) “Use it or Lose it” rule in case of mergers and acquisitions of domestic airlines.
• Grandfather Rights‟ means slots allocated to a particular carrier in the previous season and which were used to a significant extent, are reverted to the same carrier. This policy accounts for allocation of a large majority of slots, particularly at peak times.
• In the context of mergers, according to the domestic air transport policy, the airline which is merging with or acquiring another airline, is allowed to take control of the airport infrastructure, including slots of the latter.
• Use it or Lose it‟ rule implies that this right will be available with the airline that takes over till such time as the infrastructure/rights are under use. If the concerned infrastructure is not used, the airline will lose the user rights over the infrastructure including the slots.
• As per the slot allocation policy, after allocation of slots on the basis of 'grandfathering' and 'use it or loose it' basis, 50% of the left over slots are allotted to the new airlines. There are no charges for peak and non peak slots in the policy.

Air China to buy 31 Boeing aircrafts for $4.8 billion

NDTV

Air China Ltd will buy 31 aircrafts from Boeing Company to expand its fleet capacity, the firm said in an announcement filed with the Hong Kong stock exchange on Friday.

The company has agreed to purchase 2 Boeing 747-8I aircrafts, 1 Boeing 777-300ER aircraft and 20 Boeing 737-800 aircrafts at a cost about of about $2.6 billion and is expecting to take delivery in stages between 2014 and 2015.

Air China Cargo will purchase 8 Boeing 777-F aircrafts for about $2.23 billion, the company said, adding the delivery is expected between 2013 and 2015.

Ryanair to cut down flights from Stansted over landing fee row

The Telegraph
by Joise Ensor

Ryanair had planned to increase the number of flights to and from the Essex airport by 5 per cent from April, but will now cut 170 flights across 43 routes a week because of increased fees at Stansted.

The reduction means that 1.1 million Ryanair passengers will travel through the airport, which Ryanair claims could cause the loss of up to 1,000 jobs there.

More than 50 per cent of Stansted's flights are generated by the budget Irish airline.

The announcement came after Stansted was sold by Ferrovial/BAA to Manchester Airports Group (MAG) for £1.5 billion.

Ryanair blamed its decision on a 6 per cent increase in charges at the airport, which it says should be investigated by the Civil Aviation Authority (CAA).

Ryanair spokesman Robin Kiely said: "It's bad enough that Ferrovial/BAA has doubled prices over the past six years and presided over record traffic falls at

Stansted, but it appears that the CAA now rewards this commercial failure by allowing Ferrovial/BAA to again raise fees in 2013 to compensate for its traffic declines in 2012."

He continued: "Ryanair and other Stansted airlines now must ask was this surprise price increase part of a sweetener package to persuade MAG to pay £1.5bn for Stansted."

Stansted is one of several UK airports, including Gatwick and Heathrow, that negotiates price increases every five years.

Boeing to cut jobs at second Dreamliner plant: report

Reuters
Reporting By Bill Rigby. Editing by Andre Grenon

Boeing Co will cut hundreds of jobs at a South Carolina plant that makes 787 Dreamliners over the course of this year, but the move has nothing to do with the recent grounding of the troubled jetliner, the Wall Street Journal reported on Thursday.

The cuts, which chiefly target contract workers, are not uncommon as productivity improves on a new airplane program and were conceived before major problems with the 787s battery surfaced, the Journal said. Two high-profile battery malfunctions led to international aviation regulators grounding the jetliner in mid-January.

The cuts could account for up to 20 percent of the workforce in some teams at the plant in North Charleston, South Carolina, the Journal reported, citing an unnamed source familiar with the plan. Overall, the plant employs more than 6,000 people.

Jet Airways seeks aviation ministry nod to buy 6 Kingfisher slots

Times of India

With the government withdrawing Kingfisher Airlines' international flying rights and domestic slots, the Jet Airways has approached the aviation ministry to acquire six of the vacant slots, according to sources.

"We have applied to the government to acquire six slots from Mumbai. Of these, we are looking at four domestic and two international routes," Jet Airways sources said.

Out of the six slots from Mumbai, Jet has sought three morning slots and remaining three evening ones, they said adding, "the destinations are being worked out."

Last week, the government had withdrawn all domestic and international flying slots of Kingfisher Airlines, which remains grounded since October 1 last, with immediate effect and decided to allot them to other domestic airlines.

The Vijay Mallya-promoted carrier's flying licence also expired last December, which though can be revived.

Besides operating on domestic routes, Kingfisher also used to operate to Britain (seven flights a week), the UAE (21 flights per week), Thailand (21 weekly flights), Nepal (seven), Bangladesh (14 a week), Sri Lanka (35 per week), Hong Kong (14 a week) and Singapore (7).

The withdrawal of these slots has made available approximately 25,000 seats per week for other carriers to these eight countries.

Interestingly, the Naresh-Goyal promoted Jet Airways is seeking these slots after selling its all three slots at the premier London's Heathrow airport to the Abu Dhabi-based Etihad for USD 70 million last week, in a move that may bring its ongoing discussions with the Gulf carrier for stake sale closer to fruition.

AirAsia Jumps on Profit Surge, Dividend Plan: Kuala Lumpur Mover

Bloomberg
by Chong Pooi Koon

AirAsia Bhd. (AIRA), Asia’s biggest discount carrier, jumped the most in 30 months in Kuala Lumpur trading after saying it will adopt a dividend policy this year as profits rose for a fourth straight quarter.

The stock surged 8.3 percent to 2.86 ringgit at the close, the most since Aug. 5, 2010. It was the third-biggest gainer in the MSCI Emerging Markets Index. AirAsia shares have fallen 21 percent in the past 12 months. The benchmark FTSE Bursa Malaysia KLCI Index was little changed today.

IAG defends BA-Iberia merger as Spanish airline falls to near-€1bn loss

The Guardian
by Gwyn Topham

International Airlines Group has said it is too early to judge the British Airways-Iberia merger after its strike-hit Spanish unit pushed the wider business to a near-€1bn (£863m) loss with a writedown that all but wiped out BA's profits.

IAG's chief executive, Willie Walsh, said the operating performance of the merged group was "solid" with an overall loss of €23m once exceptional costs such as the €343m writedown of Iberia were stripped out. However, he admitted that the losses at Iberia – which have struck at the rationale for the merger – were "completely unacceptable". One-off items – comprising the writedown, pension costs and a restructuring charge at Iberia – pushed the year's results into the red with a pre-tax loss of €997m compared with a profit of €503m for the same period last year.

US Airways Flight Attendants Approve New Contract

The Chicago Tribune
Reporting by Karen Jacobs; Editing by Gerald E. McCormick

Flight attendants at US Airways Group Inc approved a contract with the carrier which provides pay raises and job protections by a margin of 80 percent, their union said on Thursday.

The present US Airways, which has about 6,700 flight attendants, was formed from a 2005 merger with America West Airlines. Flight attendants at US Airways have been working under separate contracts for years as their union negotiated to reach a joint agreement. The new contract would apply to flight attendants of the premerger US Airways and of the former America West.

The Association of Flight Attendants-CWA said the agreement boded well for US Airways flight attendants, as US Airways has announced plans to merge with AMR Corp's American Airlines, a tie-up that would form the world's biggest air carrier.

The pact requires discussions with management from American and US Air as well as the Association of Professional Flight Attendants union that represents American's flight attendants to develop a framework for integrating the two carriers' workers.

American Airlines seeks OK for more Brazil flights

Bloomberg

American Airlines said Thursday that it's seeking U.S. government approval to operate more flights to Brazil.

The airline said it filed an application with the Department of Transportation to add a new daily round-trip flight between Sao Paolo and both Los Angeles and Chicago.

American wants to start the Los Angeles flights late this year and the Chicago flights in late 2014.

The airline said Brazil is an important and growing market.

American, the third-largest U.S. carrier behind United Airlines and Delta Air Lines, flies from Miami to Belo Horizonte, Brasilia, Manaus, Recife, Rio de Janeiro, Salvador and Sao Paulo. It also flies to Rio de Janeiro and Sao Paulo from New York's John F. Kennedy International Airport and Dallas-Fort Worth International Airport.

American parent company AMR Corp. announced two weeks ago that it plans to merge with US Airways Group. If antitrust regulators approve the deal, the combined company would have strong routes to Latin America and compete closely with United and Delta on service to Europe but lag in service to Asia.

Ryanair to Appeal Blocked Aer Lingus Bid

Reuters
Reporting by Stephen Mangan, Editing by Padraic Halpin and Mark Potter

Budget airline Ryanair will appeal Wednesday's decision by Europe's anti-monopoly watchdog to block its third takeover bid for Aer Lingus, potentially leaving the fate of its Irish rival in limbo for years.

The rebuff was expected after Ryanair said earlier this month the EU Commission had told it of its intention to block the 694-million-euro ($917 million) bid to seize control of Ireland's 75-year-old former flag carrier.

The veto, which is the first time the Commission has twice rejected a proposed takeover, was expected to force Ryanair chief Michael O'Leary to decide whether to finally set its smaller rival free by selling its 30 percent stake.