Aviation Newsletter – December 08 to 12, 2014

The recent addition to the list is the budget airlines, SpiceJet, as it battles the directives of DGCA, frail financial health and low infusion of funds.

Dec 12, 2014 12:12 IST India Infoline News Service

Top News
SpiceJet! Was it a ‘Rare’ mistake to invest
The recent addition to the list is the budget airlines, SpiceJet, as it battles the directives of DGCA, frail financial health and low infusion of funds. Even as the company’s revenue doubled in the last three years culminating in Rs. 6356.3 crores, the losses accrued as well to Rs. 1600 crores. Moreover, rupee-dollar rate conversion also had its impact on the finances of the firm. Union Civil aviation minister Ashok Gajapathi Raju said, “We are running through a lot of turbulent weather.SpiceJet seems to be giving us heart attacks as far as airlines are concerned.” Read More 
Reliance Capital evaluates opportunities to unlock value
The Exchange has sought clarification from Reliance Capital Ltd with respect to news article appearing in The Times of India on December 10, 2014 titled "RCap to gain 12 fold from Rs 500Crs Yatra.com stake sale" Reliance Capital Ltd replied stating "We wish to inform that the Company is continuously engaged in evaluating opportunities to unlock value from all its minority investments in non-core areas outside its financial services businesses. As and when any transaction is finalised resulting in a disclosable event, the Stock Exchanges will be promptly informed as required under Clause 36 of the Listing Agreement. Earlier report stated that company is planning to exit the investment, pocketing a return of about 12 times in eight years.Other investors in Yatra.com include TV18 Group, Norwest Venture Partners, Intel Capital, IDG Ventures India and Vertex Venture.
Etihad Airways Investment in US Supports more than 200,000 Jobs
Etihad Airways for new Boeing aircraft is supporting more than 200,000 American jobs, the airline’s President and Chief Executive Officer, James Hogan. Since 2006 the airline has introduced or placed orders for 115 wide-bodied Boeing aircraft, including 71 Boeing 787 Dreamliners, the first of which will enter service early next year. The US Department of Commerce estimates that for every US$1 billion invested in the US aerospace industry, 5,747 American jobs are supported. Mr Hogan was speaking at the UAE – US Business Council lunch in San Francisco to celebrate the successful launch of Etihad Airways’ non-stop flights to San Francisco on 18 November, one of six destinations in the US.
Domestic News
SpiceJet is not under a Cash-and-Carry payment mode
The Exchange had sought clarification from the company with respect to news appearing on Economic Times website on December 05, 2014 titled " SpiceJet dives over 12% as AAI puts it on cash-and-carry." The company replied stating "We would like to clarify that SpiceJet Limited is not under a "Cash-and-Carry" payment mode with Airport Authority of India as wrongly reported in certain sections of the media."
Vistara, Air Asia may keep air fares low in 2015
According to the report, Aviation company Vistara will start operations early next year and its promised high quality full service. Vistara will be in direct competition with Jet Airways report said. Air Asia will be taking an aim at nofrills biggie IndiGo. IndiGo itself is adding one aircraft a month to its fleet and will ramp up more once the 180 aircraft.
Belgium Strike: Jet Airways to cancel Brussels flights
The planned nationwide strike in Belgium on Monday, December 15th will directly affect flight operations in and out of Brussels airport (BRU). The airline is implementing measures to minimise passenger disruption, with guests being protected and re-accommodated on other flights.
Other options that are being offered to guests who have purchased tickets to travel to, from or via Brussels on December 15th, 2014 and who now wish to change their flight plans are as follows. Guests have been offered first travel options on Jet Airways flights operating on earlier or later dates in the lowest available price band.
Jet Airways may drop plan to transfer ATR turboprop fleet to JetLite
Jet Airways is planning to drop a plan to transfer the airline's ATR turboprop aircraft fleet to its subsidiary JetLite for now, says report. Report stated that Jet currently has 18 ATRs in its fleet, which cater to the airline's regional routes, while JetLite has a total fleet of 11 Boeing 737 planes. This move was part of the airline's overall profitability plan. Airline chairman Naresh Goyal had earlier said that Jet Airways was looking at restructuring the fleet.
Jet Airways and American Express launches Jet Airways American Express Corporate Card
Jet Airways and American Express announced the launch of the Jet Airways American Express Corporate Card. The co-branded Card will help small & mid-sized companies and their executives save substantially on business travel and entertainment expenses. In an environment where corporate India is poised for economic expansion and business travel is likely to increase, the Card could be a significant driver of savings, which are earned in the form of JPMiles and corporate rebates on Taj Group of Hotels.
Spicejet: Our fleet is currently 37 aircraft, well above limit of 20
Spicejet Ltd has given clarification on some reports. It has been reported is some newspapers that SpiceJet's international flying rights may be in jeopardy as our fleet may fall to below 20 aircraft. The airline clarified that this is absolutely incorrect and false information, as our fleet is currently 37 aircraft, well above the limit of 20. These newspapers neglect that fact we also have 15 Bombardier Q400s in our fleet in addition to 22 Boeing 737s.
It has been reported in some media that our payables to suppliers is Rs 1600cr, and that we have been directed by the DGCA to clear these payments by Dec 15. First, our payables to suppliers is significantly less than the Rs 1600cr number being erroneously quoted. Second, the DGCA has not asked for all payables to be cleared by Dec 15, it has asked for a payment plan to be shared with them by Dec 15.
Accelya Kale employees run for a cause in Pune International Marathon 2014
Accelya Kale, a leading provider of financial and business intelligence solutions to the Airline and Travel industry participated in the 29th Pune International Marathon which took place on Sunday, 7th December, 2014. The main objective was to support the cause of child welfare and rehabilitation. The marathon charity run started from Khandoji Baba Chowk, Sambhaji Pool and concluded at Nehru Stadium. Employees from Accelya Kale participated in the charity run to promote CSA (Catalysts for social action) which actively works for child care institutions and adoption agencies.
AirAsia declared as ‘World’s Leading Low Cost Airline’ for two years in a row
AirAsia claimed the coveted title of ‘World’s Leading Low Cost Airline’ for the second year in a row at the prestigious World Travel Awards 2014 Grand Final Gala Ceremony, which was held in Anguilla yesterday. Datuk Kamarudin Meranun, Executive Chairman and Co-Founder of AirAsia, received the award from Graham Cooke, President of World Travel Awards at the Grand Finale of the World Travel Awards 2014.
The World Travel Awards, also hailed as the ‘Oscars’ of the travel industry recognizes companies, organizations and brands that push the boundaries of industry excellence. AirAsia emerged as the winner in the ‘World’s Leading Low Cost Airline’ category, receiving the highest votes from travel professionals from around the globe, surpassing other nominees in the category, namely airberlin, easyJet, flydubai, JetBlue Airways, Jetstar Airways, Kulula, Mango, Norwegian, Ryanair and also Southwest Airlines.
International News
Etihad Airways bags ‘World’s Leading Airline’ award for sixth straight year
Etihad Airways has been awarded the highly coveted title of ‘World’s Leading Airline’ for the sixth straight year at this year’s World Travel Awards (WTA). In addition to winning ‘World’s Leading Airline’, Etihad Airways scooped up a further two awards ‘World’s Leading First Class’ and ‘World’s Leading Cabin Crew’. World Travel Awards was established in 1993 to acknowledge excellence across the tourism industry and is widely recognised as a hallmark of ultimate quality. The awards are decided through a global vote by more than 500,000 travel professionals and high-end tourism consumers from 171 countries, with the ceremony held this year on the paradise island of Anguilla in the Caribbean.
Qatar Airways new branding graces Camp Nou stadium
Qatar Airways has renewed the branding that covers FC Barcelona's stadium, Camp Nou. The new image, which is based on the concept of ‘a team that unites the world’ – first introduced in the popular TV spot created to support the partnership – shows a design which incorporates FC Barcelona players, Qatar Airways cabin crew and an aircraft from the Qatar Airways fleet. Javier Mascherano, Jordi Alba, Neymar Jr., Leo Messi, Gerard Piqué and Andrés Iniesta are the representatives of the club that appear in the new façade welcoming FC Barcelona fans every time they go to the stadium to support their team.
SriLankan Airlines starts operations to Kunming, China
SriLankan Airlines, now gives its passengers the opportunity to explore Kunming, when it added the fifth Chinese destination to its global route map on December 1, 2014. Connecting from Colombo, passengers can discover the best kept secrets of China’s “City of Eternal Spring”, which is also the capital and the largest city in Yunnan Province of South West China. The city is home to several universities, museums, galleries and other important economic, cultural, and educational institutions, making it a popular destination among both leisure and business travellers.
Airline Profitability improves with Falling Oil Prices: IATA
The International Air Transport Association (IATA) announced an outlook for improved industry profitability in its Economic Performance of the Air Transport Industry report. Airlines are expected to post a collective global net profit in 2014 of some $19.9 billion (up from the $18.0 billion projected in June). This looks set to rise to $25.0 billion in 2015. Lower oil prices and stronger worldwide GDP growth are the main drivers behind the improved profitability.
Consumers will benefit substantially from the stronger industry performance as lower industry costs and efficiencies are passed through. The airline industry is highly competitive. After adjusting for inflation, average return airfares (excluding taxes and surcharges) are expected to fall by some 5.1% on 2014 levels and cargo rates are expected to fall by a slightly bigger 5.8%.

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