The Flying Engineer

IndiGo, India’s largest airline by domestic market share, today accepted its first Airbus A320neo at Toulouse, France. The aircraft, serial number (MSN) 6799, and registered VT-ITC will be the world’s first Airbus A320neo to enter service outside Germany. IndiGo is the second airline to accept the A320neo after Lufthansa.

The A320-271N is powered by two Pratt & Whitney PW1127G-JM engines. Technical issues with the engines had delayed the delivery of these aircraft. At this stage, it is not clear if either the issues have been fully resolved, or IndiGo has benefitted from some sort of compensation from either Airbus or the engine maker Pratt & Whitey. The aircraft is expected to commence commercial operations on on before 15th March 2016.

The first flight for MSN 6799 was on 15th December 2015, nearly 3 months ago. The aircraft is fitted with 186 seats, six more (one row) than the other 101 A320s in the fleet, today. VT-ITC have 31 rows in the cabin, with no windows on the 31st row.

The geared turbofan (GTF) engines fitted on the A320-271N are expected to be quieter than the IAE V2527-A5 engines that power the current fleet of 101 aircraft. The engines are also expected to be more fuel efficient, delivering over 11% fuel burn advantage over the current engines.

The current engines (with the external casing) has a horizontal diameter of 2 meters. The neo engines, with the casing, have a horizontal diameter of 2.67 meters.

It is learnt that technical crew trained on the A320neo are for now based only at Delhi, Kolkata and Bengaluru. The aircraft will be based at Delhi, and initial routes may include DEL-CCU vv and DEL-BLR vv.

Why the FIA’s case against the removal of the 5/20 rule is unjustified

25 Thursday Feb 2016

Posted by theflyingengineer in Air India, AirAsia India, General Aviation Interest, Go Air, IndiGo, Jet Airways, SpiceJet, TATA-SIA, Vistara

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20, 5, Air, Airlines, Airways, India, Indigo, Jet, justification, Rule, Spicejet, unjust

Today, India, for the size that it is, has only four airlines that fly international: Full service carriers (FSCs) Air India and its subsidiaries, and Jet Airways, and Low cost carriers (LCCs) SpiceJet and IndiGo. This is in contrast to the 10 airlines that operate domestic scheduled services in India, today. While Indian carriers flew 81 million domestic passengers in calendar year 2015 (CY2015), Indian carriers flew only 18 million passengers in the same period.

Only two airlines/airline groups operate short, medium and long haul international services: Air India and Jet Airways. Both airlines have diverse fleets: from short haul domestic ATR 72 turboprops to long haul international Boeing 777s. The LCCs in contrast have narrowbody jets that can cater only to short haul international services.

Due to the limitations of fleet and perhaps the lack of commercially attractive international destinations, LCCs IndiGo and SpiceJet deployed only 4.8% and 9.5% of their total flights on international, in CY2015. In contrast, Jet Airways (Including operations from the Jetlite AOP) deployed 22.1%, while Air India (Including Air India Express and Air India Regional (Alliance)) deployed 32.7% of its total flights on international. Air India and Jet Airways together contribute to 84.5% of all international departures by Indian carriers, while IndiGo and SpiceJet contribute to just 8.8% and 6.8% respectively.

This statistic shows IndiGo and SpiceJet are very small players in the international front, serving destinations at neighbouring countries. IndiGo operates only to five international destinations: Kathmandu (Nepal), Muscat (Oman), Singapore (Singapore), Bangkok (Thailand), and Dubai (U.A.E.), while SpiceJet operates only to six international destinations: Bangkok (Thailand), Colombo (Sri Lanka), Dubai (U.A.E), Kabul (Afghanistan), Male (Maldives), and Muscat (Oman).

Air India and Jet Airways started operations before the 5/20 rule was instated in the year 2005. IndiGo and SpiceJet started operations after the 5/20 rule was introduced. The 5/20 rule requires airlines to operate domestic services for a minimum period of five years, after which it can fly international only if the airline has a fleet size of 20 or greater.

Air India Express was the only airline to start immediate international operations (although on an AOP different from Air India) after the 5/20 rule was introduced. The first flight of the airline was an international flight.

Neither IndiGo nor SpiceJet fought the 5/20 rule at that time as the focus of both airlines then, as it is today, is to tap the potential of the domestic market. SpiceJet started international operations in October 2010, while IndiGo commenced international operations in September 2011. Despite both LCCs having started international operations nearly five years ago, when the scale of domestic operations were smaller, both airlines chose not to focus on international operations. (See IndiGo’s fleet induction, here) Both airlines always had the option of inducting larger aircraft to serve destinations beyond the surrounding Asian and Middle East countries. But such is not their business model.

As a result, the only Indian carriers to majorly serve international are Air India and Jet Airways, both of which were not ‘victims’ of the 5/20 rule, whereas IndiGo and SpiceJet, which chose to focus on domestic even though they started international operations five years ago, are ‘victims’ of the 5/20 rule, strongly opposing the removal of the a rule that means nothing, and does not impact either airline..

Go Air

Go Air started operations in the year 2005, but chose not to increase its fleet beyond 19 aircraft. It deferred its 20th aircraft, which was readied by Airbus. As a result, the airline does not fly international, and seems to have no issues remaining a domestic player. Yet, the airline opposes the removal of the 5/20 rule, though it chose not to operate international.

Wasted capacity

In the quarter ending 31st December 2015, a total of 12.6 million international passengers were carried by both Indian and international airlines. Of that number, Indian carriers flew just 4.5 million passengers, or just 36% of the total traffic.

India is underutilising its bilaterals, due to restrictions placed by rules such as the 5/20. For the purpose of this case, and for want of time, we consider only three international destinations: Singapore, Bangkok, and Kuala Lumpur.

As of late February 2016, there are three airlines from Singapore that operate to 13 destinations in India. Singapore Airlines, Tiger Airways and Silk Air together operate 134 flights per week to India, from Singapore, and an equal number of return flights. Together, the airlines deploy 30,517 seats per week between Singapore and India, in each direction, using a variety of aircraft: Airbus A319s, A320s, Boeing 737-800s, Airbus A330s, Boeing 777-200s, 777-300s, and Airbus A380.

In contrast, three Indian airlines (four if you count Air India Express separately) connect Singapore to only four destinations in India. Air India, Air India Express, Jet Airways and IndiGo together operate 63 flights per week between the two countries. Together, the airlines deploy just 13,244 seats per week between Singapore and India, in each direction, using Airbus A320s, Boeing 737-800s, Airbus A330-300s, and Boeing 787-8s.

Thai Airways, Thai AirAsia, and Bangkok Airways operate from Bangkok to eight destinations in India, flying 73 flights and deploying 19,497 seats per week, Using Airbus A320s, Boeing 747s, 777-200s, 777-300s, Airbus A330-300s, and Boeing 787-8s.

In contrast, SpiceJet, IndiGo, Jet Airways and Air India together operate 62 flights, deploying 12,474 seats per week, from four Indian destinations to Bangkok, using Airbus A320s, Boeing 737-800s, 737-900s, and Boeing 787-8s.

From Kuala Lumpur, AirAsia Berhad, AirAsia X, Malindo, and Malaysian Airlines operate 180 flights to 12 Indian destinations, deploying 32,903 seats per week between Malaysia and India, using Airbus A320s, Boeing 737-800s, 737-900s, and Airbus A330-300s.

In contrast, only Air India Express operates to Kuala Lumpur, connecting only Chennai to the Malaysian capital with 4 weekly flights and deploying 744 seats per week.

While not all destinations are commercially viable, there is a huge mismatch between the capacity deployed by foreign carriers, and the capacity deployed by Indian carriers, on the same set of routes. Infact, the superior connectivity offered by foreign carriers is not matched by Indian carriers, leaving a large scope for more Indian carriers to boost the Indian economy while also providing international passengers seamless domestic connectivity.

The 5/20 rule must go if India should see it’s own airlines connect India with the rest of the world.

What the FIA won’t tell you

The Federation of Indian Airlines (FIA), have something against the airlines of the Father of Indian Aviation (FIA), Late JRD Tata. The Tata’s have already done enough to promote connectivity within India: TATA airlines was renamed Air India.

The FIA (Federation) is shaken by the prospects of airlines such as Vistara and AirAsia India. The goal of the FIA is to restrict the operations of such airlines to within India, so that players like the market leader can use its low cost base to lower fares on every route such airlines fly, and bleed the airlines dry. Starting with the smallest and the least capitalised airlines, airlines will knock off the Indian scene, one by one, leaving only a few to operate in India, with the market player enjoying a huge monopoly in setting fares. At that point in time, India will suffer, with neither good international connectivity, nor with strong domestic competition nor worthy alternatives.

While the FIA blames consultancy firm KPMG of auditing Singapore Airlines and consulting for the government, it remains silent on consultancy firm CAPA.

CAPA India, in its Aviation Outlook 2016, stated, “Despite repeated statements by the Minister that there is no logic to the 5/20 rule and that it should be abolished, the discriminatory regulation still remains in place”.

Guess which consultancy firm’s services was sought for IndiGo’s Red Herring Prospectus? CAPA India.

IndiGo to fly India’s longest daily domestic flight effective 7th January 2016

11 Friday Dec 2015

Posted by theflyingengineer in Airline, General Aviation Interest, IndiGo

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Delhi, Domestic, Flight, India, Indigo, longest, Trivandrum

6E A320

IndiGo will launch a direct daily flight between Delhi and Trivandrum (Thiruvananthapuram) on 7th January 2016, making it the longest domestic direct daily flight to be presently offered in India, with a block time of 3:15 hours.

6E 533 will fly DEL-TRV effective 7th January 2016, and 6E352 will fly TRV-DEL effective 8th January 2016.

No other operator offers direct flights between the two cities.

The flight will cover a great circle distance of 1201 nautical miles (NM) or 2,224 km.

Presently, the longest direct daily domestic flight in India is between Mumbai and Guwahati, operated only by IndiGo, with a great circle distance of 1,119 NM and a block time of 3:00 hrs from BOM-GAU, and 3:30hrs from GAU-BOM. The 30 minute difference is due to headwinds when flying from Guwahati to Mumbai, which serve as tailwinds when flying from Mumbai to Guwahati.

Thanks to Ameya: The longest domestic flight is Port Blair – Delhi (1,339 NM) operated by Air India regional on their CRJ 700s on Fridays and Sundays.

ATR 72 is now EASA certified for 78 seats

08 Tuesday Dec 2015

Posted by theflyingengineer in Aircraft, General Aviation Interest

≈ 1 Comment

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72, 78, 86, Approval, ATR, Bombardier, CASK, Cebu, Density, EASA, High, Pacific, Q400, Seats

ATR received EASA certification for its high-density cabin layout which fits 78 seats, using the existing airframe which was until recently certified for a maximum of 74 seats. Cebu Pacific, the leading Phillipines low cost airline, is the launch customer of this new configuration of the ATR 72-600. The airline had formally announced an order for 16 ATR72-600s during the Paris Air Show with options to acquire an additional 10 ATR 72-600, worth US$673 million at list prices.

Cebu Pacific will receive its 78 seat aircraft in August 2016. According to ATR, ” The additional seats are very valuable for airlines operating in the regions where traffic grows rapidly and the demand is highly sensitive to fare”. According to Thierry Casale, ATR Senior Vice President Programmes, “The demand comes from airlines, especially in the Southeast Asian market, requesting to further optimize the cabin space and to increase the number of available seats for regional flights".

In August 2014, Thailand’s Nok Air took delivery of an 86 seat Bombardier Q400, becoming the launch operator for the extra capacity seating configuration. Bombardier was able to squeeze in 86 seats at 29 inches seat pitch by shifting the aft galley into the aft cargo hold, thereby reducing aft cargo space by 20%. Forward baggage hold is done away with.

ATR can pack in 78 seats by reducing seat pitch to 28 inches, downsizing and moving the aft galley into the rear cargo compartment, and by placing two rear facing seats in the first row, which take up a part of the otherwise forward right cargo hold, thereby reducing forward cargo space. ATR’s target is an 80 seat ATR 72, which will be possible only with four, rear facing seats on the first row. Such seats do not recline.

The configuration is built with the current SFE Geven Classic seats, requiring no special or different seats.

Interestingly, demand for these configurations have come exclusively from South East Asian low cost operators. According to a study that the ‘Association of Southeast Asian Nations DNA’ conducted, Filipinos are the second shortest race in the South East Asian region, with males measuring 5 feet 3.7 inches. Thailand’s males are the second tallest, at an average 5 feet 6.9 inches. This makes Filipino men 4.8% shorter than the average Thai man, while a 28 inch seat pitch is only 3.4% lesser than a 29 inch seat pitch. Assuming similar thin seats on both aircraft, Filipinos, due to their height, may feel as comfortable, if not more comfortable, than Thai men flying in the high density Q400.

Indonesian males are the shortest in the South East Asian region, at 5 feet 2 inches, which makes the 78 seat variant well suited for the Indonesian market. If airlines are scientifically driven, airlines in other countries may not opt for the 78 seat variant, unless the business model decides otherwise.

The 78 seat ATR 72 seats 4 more than the until-recent maximum of 74. Assuming a 100% seat factor, 4 extra passengers will burn around 11 kg additional fuel on a 250NM sector, assuming ancillary cargo remains unchanged. This results in a 1.3% fuel burn increase on a 250NM sector, or a 0.65% increase in costs assuming fuel is 50% of the total operating expenses. Yet, due to the four additional seats, the cost per seat, after including the fuel increase, drops by 4.5% on a 250NM sector. We ignore possible increased maintenance costs due to slightly higher stressed operations.

This allows an airline to drop average fares by down to 4.5% to remain competitive in the market at unchanged margins.

Mitsubishi takes to the skies – First flight of its 92 seat MRJ 90 Regional Jetliner

11 Wednesday Nov 2015

Posted by theflyingengineer in General Aviation Interest

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70, 90, Analysis, Bombardier, Embraer, First, Flight, Jet, market, Mitsubishi, MRJ, Regional

MRJ90

Japan’s first commercial jetliner, the Mitsubishi Regional Jet (MRJ) 90 took to the skies at 8:30 in the morning from Japan’s Nagoya airfield, for a flight that lasted nearly 85 minutes long. The flight was conducted by a MRJ 90 STD, registered JA21MJ, with construction (serial) number 10001. The aircraft flew with a constant flap setting, landing gear down and locked, and thrust reversers de-activated.

The first flight marks a major milestone for a program that is significantly delayed. The first flight was planned for 2012.

The 92 seat MRJ 90 has a seating capacity that directly competes with the 88 seat Embraer E175, and the 90 seat Bombardier CRJ 900. However, the aircraft is fitted with Pratt & Whitney’s high bypass Geared Turbofan Engines (GTF), which allow the aircraft superior fuel economics than any sub-100 seat regional jet, today. This is the MRJ 90’s USP.

Below is a comparison of key performance, weights and dimensions between the Bombardier CRJ900, Embraer E175, and the Mitsubishi MRJ 90:

Key Performance, Weights, Thrust, Dimensions MRJ CRJ E175

Below is the comparison of ranges between all three aircraft and their sub variants:

CRJ_E715_MRJ ranges

The last Japanese commercial airliner program was the YS-11 turboprop airliner, in 1960. The MRJ program, which marks a comeback of the Japanese airliner market after a gap of nearly 60 years, adds an additional player in the regional jet market.

The regional jetliner market today is dominated largely by Embraer and Bombardier, with Embraer grabbing a larger share of the pie. Sukhoi’s Superjet International SSJ 100, a 100 seat regional jetliner, is so far an insignificant player. China’s regional jet, the ARJ 21, hasn’t yet entered service. Mitsubishi becomes the fifth player.

However, Mitsubishi will be the third aircraft program to penetrate the United States Market. 76% of the MRJ 90’s firm orders are from airlines in the United States. 170 aircraft are ordered by three US regional airlines: Trans States Holdings (a holding company for three regional airlines), Sky West, and Eastern Airlines.

A new aircraft brings with it two key questions that affect sales : How reliable will the aircraft be, and how good with the customer support be?

A new aircraft will almost always have issues with reliability before the aircraft ‘matures’ and corrections are made to the production aircraft. This has been seen with the Boeing 787, the Embraer E190 (when it entered service with JetBlue), the Airbus A380 – all new airplanes have their fair share of troubles till the product matures. The MRJ 90 will be no exception.

Customer support, which can sway market shares, has been carefully dealt with, by MRJ. Boeing Commercial Aviation Services, which today is one of the best, will provide Mitsubishi Aircraft with 24/7 customer support including spare parts provisioning, service operations and field services, until Mitsubishi takes service in-house.

Another important aspect for an airplane is the residual value of the aircraft – data that is yet unavailable. Lessors prefer to bet on airplanes that they know for certain will have a good enough market residual value to capitalise on.

Is the MRJ 90 in a good segment?

The MRJ 90 is an airplane with better market prospects than the MRJ 70. Since the beginning of 2009, Embraer has recorded 0 net orders for the 78 seat EMB170 regional jet, and Bombardier has recorded just 28 net orders for the 78 seat CRJ 700. On the other hand, since beginning 2009, Embraer has recorded a net 443 orders for the 88 seat E175 and E175E2 together, and Bombardier has recorded 139 net orders for the 90 seat CRJ 900. The 90 aircraft market has had better prospects over 27 quarters than any other size of regional jets. Below are the order graphs:

Bombardier Orders

Embraer Orders

The MRJ 90 is in a very hot segment, which can get hotter if scope clauses in the United States are upward revised. The clause today limits US regional airlines to an aircraft weighing no more than 39 tonnes and limited to 76 seats. Unfortunately, the MRJ 90’s minimum maximum takeoff weight is 39.6 tonnes, while the lighter variants of the CRJ 900 and EMB 175 are within this specification.

The MRJ 90 is in a very unique position. Bombardier is not neither developing nor re-engining aircraft that are below 100 seats. The CRJ 700, 900 and 1000 aircraft will soon fade away as Embraer re-engines its aircraft and revises the wings to offer the market better versions (second generation) of the present E175, E190, and E195 regional jet models. Bombardier’s customer support history also works against the manufacturer. This effectively reduces notable competition to just Embraer and Mitsubishi in the sub-100 seat regional aircraft space.

The second generation of the Embraer E175, renamed the E175 E2, will be fitted with engines similar to the MRJ90, matching the MRJ 90’s fuel economics. However, the E175 E2 is expected to enter service only in 2020.

The MRJ 90 on the other hand is expected to enter service in 2017. However, uncertainty looms about the manufacturer sticking to its timeline, as it has not had any proven track record of dealing with jetliner programs in the recent past. Bombardier, an experienced manuafcturer, has slipped the CSeries’ timelines. It will not be surprising if Mitsubishi does the same. But even if the timelines slip by a year, to 2018, Mitsubishi will have atleast a 2 years head start over Embraer in the sub-100 seat regional jet space.

Regional Connectivity Scheme (RCS) – Boosting Regional Aviation

09 Monday Nov 2015

Posted by theflyingengineer in General Aviation Interest

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2, 42, 72, aerodromes, airports, airstrips, ATR, Bombardier, cess, Connectivity, Embraer, Fun, Gapo, India, operational, RCS, Regional, Scheme, Viability

NCAP 2015 Regional Aviation India

The Draft National Civil Aviation Policy (NCAP) 2015 proposes to boost regional connectivity in the country through the implementation of a Regional Connectivity Scheme (RCS). The RCS is aimed at making financially unviable, but economically important flights on certain regional routes a reality.

But for this to come true, many moves need to be made. The Ministry claims that there are 476 airstrips / aerodromes / airports in the country. Question is, how many of them are worthy of immediate operation? Today, airlines operate into and out of just 76 airports. What is the condition of the remainder airports?

The Ministry, in its bid to promote regional connectivity, must be specific about what it will fund. We touch upon this, and also try to do the numbers about how much money the Ministry may be able to raise, and with that money, how many regional aircraft may be operated. And which aircraft types are the most likely ones for the near term and the long term.

The RCS will spell the boom of regional aviation in India, only if implemented right. But it will also tax regular airlines, and not offer any viability gap funding for these airlines. There are challenges, and there are opportunities. To learn more, please click here.

Route Dispersal Guidelines : How current airlines will face the heat

06 Friday Nov 2015

Posted by theflyingengineer in General Aviation Interest

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2, 2015, Airlines, Aviation, Civil, CSR, Dispersal, double, Guidelines, India, National, Policy, RDG, Route

The Route Dispersal Guidelines (RDG) was introduced in 1994 to provide air connectivity to Jammu & Kashmir, North East, Island territories, and Tier-2 and Tier-3 cities, by way of internal cross-subsidy by airlines, using their profits on 12 trunk routes.

Nearly 20 years after its introduction, the ministry is revisiting the rules to keep the rule relevant in today’s domestic scenario.

The ministry, as you will learn, is forcing regular scheduled airlines to deploy more capacity on category (CAT) II and IIA and III routes, and as part of the regional connectivity scheme, airlines will have to contribute to the Ministry’s Viability Gap Fund (VGF) 2% of the fare of almost all tickets sold.

Under India’s Companies Act of 2013, companies that have a net worth of $80 million, a turnover of at least $160 million, or net profits of at least $800,000 must develop a Corporate Social Responsibility (CSR) policy and spend a minimum of at-least 2% of net profit.

In this case, the Ministry is imposing a 2% on ticket revenues, not profits, irrespective of the size or health of the airline. And is forcing airplanes to fly more onto ‘unprofitable’ routes, without any subsidy, which effectively increases the amount of CSR done in the Indian aviation industry, despite the thin margins and heavy losses.

Click here to read more about the proposed RDG and what it means for the industry.

What does the 5/20 or 300/600 mean to Indian Aviation?

06 Friday Nov 2015

Posted by theflyingengineer in Airline, General Aviation Interest

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20, 300, 300/600, 5, 5/20, 600, AirAsia, DFC, Domestic, Flying, Indigo, International, Jet, Rule

The 5/20 rule – allowing airlines to fly international only after completing 5 years of operation and flying a fleet of a minimum of 20 airplanes, was introduced in the year 2005. The year 2005 was the second boom in Indian civil aviation.

Today, in the year 2015, we sit upon the next boom in Indian aviation. Since later 2013, many airlines have started: Air Costa, AirAsia India, Vistara, Air Pegasus and Trujet. The government, exactly 10 years after introducing the 5/20 rule, is going to either retain it, abolish it, or replace the rule. A rule that, on the outside, was intended to both develop domestic capacity and make sure airline operations stabilize before flying international. The true story revolves around the insecurity full service Kingfisher airlines created for one particular airline. Hence, the rule was introduced just before Kingfisher started operations in May 2005.

Since then, the industry has consolidated: Jet-Sahara, Air India-Indian, Kingfisher-Deccan, and the demise of the merged Kingfisher. What has the 5/20 achieved? It has created only 4 international airlines for the world’s largest democracy. Just 4 airlines.

We invite you to read what the 5/20 has done, what its proposed replacement, the 300/600 can do, and whether we must go in for the third option: No rule at all. Please click here.

Vistara commissions a third party for a report on the aviation sector

07 Wednesday Oct 2015

Posted by theflyingengineer in General Aviation Interest

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Aviation, Download, Indian, Key, PDF, Points, Report, Sector, Vistara

Vistara, India’s newest pan-India airline, took the trouble to prepare a report on the aviation sector in India, highlighting the numerous areas in which India can and must improve. The report also concluded that Indian aviation is blessed with undeniably strong fundamentals such as:

A large and fast growing domestic market with potential for sustainability.
A strategic location (geographic) enabling hubs / transit points for key international routes.
An abundance of tourism potential.
A strong technical and skilled workforce that can support aviation in various functions.
A traditionally service-driven culture, which augurs well for the hospitality industry.

The report went on to state that India is not a global aviation power today despite many such favourable characteristics because of poor decisions that have actively hindered the country’s aviation sector’s growth and competitiveness.

Key Take-aways, as summarized by the Vistara communications team:

1. Criticality of Aviation Sector

Aviation contributes to around 5% of GDP in leading global markets
3 billion people or 40% of the global population fly vs. low 1-2% penetration in India
Annual per capita seats in India are a quarter of China, Indonesia, Thailand
Aviation drives 27% of UAE GDP; 5.4% of US GDP
Aviation is growing rapidly in India; incremental passengers this decade was 3 times in previous 50 years

2. Potential of Indian civil aviation sector

Annual contribution of USD 250 billion to Indian economy by 2025
Employment creation to multiply 10 times to 2.3 million by 2050
Number of domestic passengers to grow 17 times to 1.1 billion by 2050
Number of international passengers to grow 10 times to 500 million by 2050
Domestic freight to increase eighteen times , and International freight more than eight times by 2050
Number of aircraft to multiply by 14 times to about 5600 by 2050

3. Policy Measures Required

1. Cost of doing business

Duties make ATF, which can constitute 30-35% of operating costs, 45% more expensive in India
Removal of sales tax will reduce ATF costs by 20% thus reducing operating costs by 7%, and stimulating air travel by around 8-9%
High taxation on MROs makes it cheaper to send aircraft abroad for maintenance, going against “Make in India" vision
Aeronautical charges are amongst the highest in the world

2. Ease of doing business

4 months in US vs. 90 days in UAE vs. more than a year and 10 agencies in India for getting an AOP
Simplification of RDG

3. Liberal Aviation regime

5/20: discriminatory to Indian airlines; impacts airlines’ risk mitigation and operational efficiencies
Indian airlines only use 26% of their bilateral rights

4. Invest in airport infrastructure, airspace management and skill development

Airport capacity shortage looms in 5 years
Additional airport capacity of 90 million passengers will be required each year from 2030 i.e. equivalent of Delhi and Mumbai airports combined

5. Focus on Safety

Access to expert and trained, fit-for-purpose resources are critical for DGCA

The 70 page report can be downloaded here.

1 Million at Toulouse

22 Tuesday Sep 2015

Posted by theflyingengineer in General Aviation Interest

≈ 4 Comments

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Engineer, Flying, Milestone, Million, the, Views

Last week, at the same time that I was visiting the Airbus A330 and A380 final assembly lines (FALs) at Toulouse (as part of my Aerospace and Aviation MBA program, which also included a visit to the ATR FAL) , the site “The Flying Engineer” crossed an important milestone.

This milestone is significant considering the audience that the website caters to. It started by catering to serious aviation enthusiasts, pilots, and engineers. Along the way, realisation dawned that it isn’t the aircraft that makes an airline successful. It’s how the aircraft is used that makes the airline successful.

This realisation made The Flying Engineer broaden, and eventually shift focus from pure technical to airline commercials and operations. How is it that in the same country a few airlines are profit making while the rest are loss making? How is it that one aircraft that is profitable for one airline in one part of the world is loss making for another airline?

It boils down to management – the depth of management. Analyses – of airlines’ performance and the mindset of the management and/or promoters is key to understanding the future of the airline.

The audience base has grown to include airline heads, promoters, aircraft manufacturers, and lessors.

With such a niche audience base, and serious insightful content that puts most to sleep, views are limited, and crossing 1 million views in 4 years is a significant milestone. The country generating the highest views are the United States of America and India. UK, Canada, France and Germany make it to the top six.

I thank you all for your support.

AirAsia India reports an after tax loss of INR 44.12 crore for Q1FY2016

21 Friday Aug 2015

Posted by theflyingengineer in General Aviation Interest

≈ 1 Comment

Key Points:

Operating loss of INR 41.8 crore
Weak Unit Revenues at INR 2.88/seat-km (operational) and INR 3,702 per passenger.
INR 1,380 per passenger short of operationally breaking even.
Unit operational costs increased by 12% to INR 3.93/seat-km compared to Q4FY2015.
Increase in Airport Costs due to Delhi operations largest contributor to increased unit costs.
Silently launched its second Bengaluru-Vishakhapatnam frequency on 14th August.
Average utilization goes upto 13hours per aircraft per day.
Highest average stage length and very high average cargo uplift per flight.
Ancillary percentage of revenue increases, on par with IndiGo’s.
Loss in Q2’16 forecasted, hopes of operational break-even only in Q3’16.

AirAsia India, an associate company of AirAsia Berhad, which owns 49% of the joint venture with Tata Sons and Telstra Tradeplace, reported an after tax loss of INR 44.1 crore for the quarter ending June 30th, 2015. The airline realised an operating loss of INR 41.8 crore in the same quarter. The first quarter is traditionally a season of peak domestic travel demand.

The airline realised an operational RASK (Revenue per available seat kilometre) of INR 2.88/seat-km, which is only 5% better than what was realised in Q4FY2015. The fourth quarter is traditionally a season of low domestic travel demand.

The airline realised an operational CASK (Cost per available seat kilometer) of INR 3.93/seat-km, which is 12% higher than what was realised in Q4FY2015.

The largest increases in unit costs were due to increases in unit maintenance costs (an increase by 105%) and unit airport costs (an increase by 175%). Increase in unit airport costs contribute to 65% of the airline’s increase in operational CASK. This is due to the airline operating from Delhi’s T3, where AirAsia India may not enjoy the same cost waivers and benefits it enjoys at Bengaluru airport. Maintenance of the aircraft occurs at Hyderabad Shamshabad’s MAS-GMR facility, which requires empty aircraft (non revenue flights, ferries) to be conducted, which is a source of cost. The opening of Delhi base may have contributed to the increase in maintenance costs.

Fuel expense of INR 1.28/seat-km is similar to what was realised in Q4’15, and similar to the unit fuel costs of SpiceJet in Q1’16.

Due to the larger fleet size and 47% increase in capacity (in ASK) deployed in Q1’16 over Q4’15, unit staff costs have fallen by nearly 10%.

Unit lease costs have very slightly gone up, perhaps due to the two additional A320s in the airline’s fleet not being fully utilised for the first couple of weeks of opening the Delhi base.

Other operating expenses went up 21% on a unit basis.

Overall, starting operations from Delhi has negatively impacted the airline’s costs, largely due to higher airport charges and the absence of benefits at the GMR airport.

In the quarter, the utilisation of aircraft was not to the fullest. Delhi operations started midway into the quarter, and Imphal and Vishakhapatnam operations started later in the quarter. On 14th August, AirAsia in total silence launched its second Bengaluru-Vishakhapatnam frequency (we had talked about this exactly 4 months earlier), increasing the average aircraft utilisation to 13 hours. As utilisation of the assets get better, certain costs are expected to go down. With sales tax on fuel at Vishakhapatnam at only 1%, AirAsia India tankers fuel from Vishakhapatnam to Bengaluru, for the next flight – Bengaluru to Cochin. While these common cost saving measures are good, the increase in unit airport charges may be concern.

Launching of new routes, and launch promotional fares are believed to have impacted unit revenues.

The airline realised an average fare per passenger of INR 3,350 per passenger, which is 16% more than Q4’15. Ancillary revenues have increased to INR 352 per passenger, 60% higher than Q4’15. Ancillary revenue, as part of total operational revenue, has increased from 8% in Q4’15 to 10.6% in Q1’16. 10.6% is similar to IndiGo’s percentage of ancillary revenue to total operational revenue.

AirAsia India’s per passenger revenue was nearly INR 1,380 short of operationally breaking even.

Average load factors in the airline (passengers flown) has increased to 81% in Q1’16. The airline flew its millionth passenger around August 5th (we had rightly predicted this towards late June).

Cargo carried by the airline in the quarter was a very high average of 1,074 kg per flight, which is the second highest for a LCC in India, after Go Air. IndiGo on average carried an average of 615 kg of cargo (freight and mail) per flight.

The average stage length at AirAsia India was 1,150km, which is the highest amongst LCCs in India.

Loss compared to IndiGo

The total loss incurred by AirAsia India, after tax, on Q4’15 and Q1’16 – two consecutive quarters – is INR 63.1 crore. This includes one lean and one peak season, and witness the airline culling one route (Bengaluru-Chennai), and the addition of 5 routes (Delhi – Goa/Bengaluru/Guwahati, Guwahati-Imphal, and Bengaluru-Vishakhapatnam).

In the first financial year of its operations (FY2006-07), in which IndiGo operated for only 7 whole months, IndiGo reported a loss of INR 201.8 crore. This works out to INR 101 crore for 2 quarters.

In the second financial year of operations (FY2007-08), IndiGo reported a loss of INR 234.7 crore, which works out to INR 117.35 for two quarters. While a comparison between an airline that was far more aggressive in its fleet induction and started 9 years ago is both unwise and incomparable, it is used to get a very rough (caution: may be misleading) idea of the kind of losses one may expect in two consecutive quarters.

Year Outlook

The airline’s CASK is expected to stabilise at lower levels moving forward. However, the improvements that may be expected are not very significant. Operational CASK may fall by only around 4-5% to around INR 3.75/seat-km (for a fleet of 5 aircraft), but may remain higher than the CASK SpiceJet today enjoys. With such a CASK, AirAsia India may report a loss in Q2’16 (Quarter ending September 30th 2015).

With unit revenues that are yet to pick up, any hope for an operational breakeven rests in Q3’16 (Quarter ending December 2015). Deploying the 6th aircraft for Q3 is necessary to increase the chances of an operational break even.

The airline today flies 34 flights a day to 10 destinations with 5 airplanes.

The airline is expected to receive only one additional A320 in the calendar year. AirAsia India is expected to close the calendar year 2015 with a fleet of 6 airplanes.

A new civil aviation policy (CAP), if favourable to AirAsia India, may see the airline quickly scaling operations. A massive change in policies, however, seems unlikely.

Conclusion

AirAsia India’s cost performance is not bad in the context of a small airline starting a large number of new routes in the quarter. Certain performance indicators in cost and ancillaries show promise. However, unit revenues are very weak. Poor unit revenue performance is expected to continue in Q2’16, with a hope of operational break-even only in Q3’16.

The Blackbox store – merchandise sample review.

26 Thursday Feb 2015

Posted by theflyingengineer in General Aviation Interest

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Aviation, black, box, merchandise, store

We received our Blackbox store merchandise samples – a mug and a crew tag. These have been put to use over the last two weeks, when we’ve been travelling and testing the tag, and sipping away from the mug.

The Blackbox store sent across a personalised ‘Crew’ tag. The tag is made of plastic, and is secured to a handle via a transparent rubbery-plastic strap. This ensures that the strap dies not distract from the tag.

The tag sample we received has ‘Aviate Navigate Communicate’ on one side and ‘CREW’ on the other side, both set against a black background. Under the ‘CREW’ is my name, which I really enjoyed as the tag was personalised. The tag is attached to my travelling pull-along suitcase, and has survived any harshness with which the baggage may have been handled. It has helped with the quick identification of baggage on the belt. The tag seems to have sustained a bit of damage, but the impressive part is that the white surface underneath the black surface has not yet been exposed. Says something about the durability of the tag.

The mug I’ve been drinking off (beverages only) is made of white ceramic, and the exterior paint seems durable – it’s lived through washes. The best part is what’s on the mug – IATA airport codes of airfields in India. It is a nice feeling to be able to drink off a mug that has 20 airport codes on it.

The Blackbox store has even more eye catching designs – crew tags, mugs, tee-shirts, and pillow covers, but our luck stretched only so far in getting samples. If you really like my work, sponsor me a tee from their store! Each one of the designs profusely bleeds aviation.

The banner below will link you to their store.

Aero India 2015 – The ‘Show’

19 Thursday Feb 2015

Posted by theflyingengineer in General Aviation Interest

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2015, 50, Aero, Bangalore, Bulls, collision, Flying, India, XL, Zlin

Aero India 2015 is lower in energy than ever. There are no big deals to announce, no big customers to woo. And that reflects in the energy at the show.

On the show front, there is a larger presence of civilian aerobatic teams. The Flying Bulls aerobatic team, the Scandinavian Airshow and the Breitling Wingwalkers, and the Yakovlevs Airshow Aerobatic team. The only other aerobatic team is the Indian Airforce’s Sarang helicopter team.

The Flying Bulls pulled out of the show after two of their aircraft collided mid-air, leading to prop damage to one and wing damage to the other. Incidentally, this was to have been the Flying Bulls’ last airshow on the Zlin 50XL aircraft, as these birds have reached the end of their airframe life.

Civil aircraft on static display includes a Dassault Falcon 7X, Falcon 2000, Pilatus PC-12, Dornier 228NG, Sukhoi Superjet 100, Let L-410 Turbolet, and an Embraer Pheonom 300.

Indoor presence is limited and low key. Original Equipment Manufacturers like UTC Aerospace have a modest stall, while a major airframer like Embraer have neither a stall nor a chalet. Dassault has a large stall, and that is only because of their optimistic outlook of the civilian and military Indian market.

SpiceJet’s ‘With All Our Heart’ VT-SZK Skymark 1:100 model review

14 Saturday Feb 2015

Posted by theflyingengineer in General Aviation Interest

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Tags

1, 100, 737, 800, All, Boeing, Heart, model, Our, Review, Scale, Skymarks, Spicejet, SZK, VT, With

The timing couldn’t have been more perfect. It’s the day of hearts, and the evening prior, FirstFlight delivered am almost 2 foot long box that had a photo of a SpiceJet aircraft on the side. The wait was over – VT-SZK ‘With all our heart’ was finally home, from SpiceShop, manufactured by Skymarks to a 1:100 scale.

Inside the box were layers of black foam that carefully housed in all eight parts – The 15 inch long fuselage with the nose gear pre-fitted, both wings with the engines and min gears pre-fitted, the two horizontal stabilizer pieces, the vertical tail, a wooden base stand, and a securing screw. It couldn’t get simpler. All pieces were were packed in plastic save the rudder and the horizontal stabs, which had made their way to the bottom of the box, where it may be prone to damage.

Assembly took just a minute, as all parts are snap fit and firmly stay in place.

From the stand, up!

The stand for the model is made of two parts – a wooden base with a polished metallic plaque bearing the SpiceJet logo, the aircraft name ‘Red Chilli’, the aircraft model, registration, and the month and year it was delivered to SpiceJet. A matt finished aluminum support is secured to the wooden base via to screws, which were loose. You’d need a star (~ez_lsquo+ez_rsquo~) screwdriver to tighten the screws, to prevent your model from wobbling with fake turbulence on the table. The support is keyed to align the hole on the support with the threaded hole at the bottom of the model’s fuselage. Slight alignment is necessary before the securing screw can be inserted.

VT-SZK was delivered to SpiceJet in May 2014, is leased from BOC Aviation, and is the airline’s prized airplane for many reasons. It finds a special place in the heart of perhaps all its employees for the singluar reason that it is the only airplane in the fleet to have an off-beat livery. The forward fuselage features three crew on either side. On the left is a lady captain flanked by two lady cabin crew, and on the right is a male captain flanked by two other lady cabin crew. The featured crew are: Capt. K. Rangarajan, Captain and Examiner, Boeing 737. Capt. Anushree Varma, Captain, Boeing 737, CCIC Roshika Chettri, CCIC Rashmani Singh, CCIC Prexa Kaushik, CC Lavi Choudhary.

The aft fuselage of the real aircraft is stickered ‘SpiceJet’ on the left, and ‘With All Our Heart’ on the right. Perfect for valentine’s?

1:100 – How scale is the model?

The measuring tape determined the length of the fuselage to be approximately 15 inches. We say approximately because a collector would never get a hard surface to contact the fuselage, for fear fo damage to the decals. The real 737-800 has an overall length (nose to the trailing tip of the horizontal stabilizers) of 1,554 inches. 1,544 / 100 (scale) = 15.44 inches. Yup, the model passes the scale test. Since the wings, engines, and tails appeared proportional, we took the scale on all axes for granted.

The most important aspect of any model airplane is the nose. Just as a human is identified by the face, and not the body, an airplane is only a scale model is its nose appears exactly like the real aircraft. Skymarks has got it right here. The model passes the major tests.

Testing Tougher

We shall progress from the nose to the tail, and examine every aspect.

The nose is simply great – it couldn’t have been more ‘737’ like. The nose bay doors’ lower edge are curved, which is unlike the real aircraft (straight). The wheels are proportional, but do not move easily.

The faces on the fuselage are a little bigger than what they should have been. This can be identified by the location of the face of the first cabin crew relative to the static port (the oval under the third passenger window). The ‘missing windows’ on the 737-8000 are reproduced here – two missing on the left, one on the right (to accommodate air conditioning ducts).

The fuselage very clearly shows the line where the ‘double bubbles’ meet (the 737’s fuselage cross section is comprised of two intersecting circles)- see the image on the left with the red arrow, pointing to a visible dent line. Although nowhere this pronounced on the real 737, it allows one to appreciate the 737’s fuselage design.

As we progress to the engines, we hit a pocket of disappointment. The engines that Skymarks has used are the Boeing 737- classic (300/400/500) engines, which have the ‘hamster pouch’ look – flattened bottom with a non-circular nacelle. The Boeing 737NGs have an almost circular nacelle. The engine fails the scale test big time. Further, the exhaust nozzle is also long. VT-SZK uses CFM 56-7BE engines, which have a shorter nozzle.

The detailing on the wing is good, complete with the walk zones, flap track fairings, and emergency exit markings. The double slotted flaps, spoilers, and ailerons with aileron tabs are marked on the upper surface. The fuel tank access panels are also marked on the lower surface.

The red ‘paint’ on the outer portion of the winglet should have run further under the surface of the winglet.

The main landing gears are simple, but the tyres are good. The model would have been more of a scale had they the white wheel caps as found on SZK. The wheel wells could have been painted black for higher level of detailing.

The stabilizer and the vertical tail plane are both well detailed, complete with the trim markings (trim markings are not symmetric and so it should have been on the model). The APU inlet door, and APU exhaust are marked.

Conclusion

SpiceJet is the only airline in India to sell 1:100 models of its aircraft (though not on board their flights, but through their website), which is a big plus. The finish of the Skymarks 737-800 is overall good, but could be better with more detailing, such as fine print text near the statics. It is definitely a model for the collector, but does disappoint a bit when it comes to certain details. Hogan’s eye for detail is much better (Example: IndiGo’s A320 ‘Premium model’ sold on board), but then, they do not offer this large a scale.

On the pricing front, the Boeing 737 1:100 is available for INR 9,499 + 13.125% tax + INR 500 shipping = INR 11,246. On airlinemuseum, Skymarks 737-800s are available or US$95, which translates to INR 5,900. Add customs and freight, and the model’s price comes close to SpiceJet’s price, perhaps cheaper by a thousand or two (or three?). But SpiceJet’s price is justified by the limited edition of its infamous aircraft.

In short – a lovely airplane model, largely faithful to the 1:100 scale, and with a finish and color accuracy that is bound to catch eyes and make you stare speechlessly – with all (y)our heart! Must have for a serious model collector.

The Black Box Store – Aviation Themed merchandise

03 Tuesday Feb 2015

Posted by theflyingengineer in General Aviation Interest

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apparel, Aviation, designs, home, merchandise, mugs, shirt, tags, tee

Merchandise for aviation enthusiasts is usually the same offering, in different variations: Airplane models, Remove-Before-Flight key chains, and some apparel. Creativity is very limited, just to conform with the narrow range of acceptable designs that qualify one as ‘serious aviation enthusiast’.

This dogmatic approach to aviation enthusiasts has been challenged by The Blackbox store. And how? It has been founded by someone who is both in aviation and not in aviation. Specifically speaking, the founder, who is also a designer, is not really in aviation but supports aviation activities. The result? Numerous friends in operational aviation – pilots, cabin crew, engineers, ground support staff, and more. With many friends come many birthdays, and the want for differentiation drove the designer to unleash the creativity within to gift something that was both unique, yet evidently aviation.

What started with gifting friends has today evolved into a full time business. The Flying Engineer got in touch with the designer, and without unnecessarily overdoing it – fell in love with the range of merchandise targeted at the aviation enthusiast. It’s not another buy and resell store – it’s a store that sells in-house designs, all proprietary of the chief designer, who wants customers more than sales, satisfaction more than profits, because of the personal belief in ,”We’re here for the long run”. No diversions!

The best part of the designs are that they are simple and generic enough to be used / worn anywhere, and yet serve as a soft, classy voice that speaks on your behalf. To someone alien to aviation, most designs appeal as a good design. To someone right in aviation, the designs appeal as classy and fresh, strongly beckoning the avgeek inside. It’s not one of those merchandise and apparel that will want you to shy in a general party – it’s what you’d perhaps want to wear to not stand out as the odd one but mingle with the crowd and yet speak of where you come from.

I’ll be honest about this – the Blackbox store designs have appealed to us, and we’re getting a couple of samples for review – shipping takes a week! We’ll probably even buy the company out – that’s how much we’ve been impressed by what’s on show at the site (and hence we’ve decided to advertise them here). We just hope that what we get is close to or better than what’s been shown on the site. We’ll soon be in a position to decide, and we’ll let you decide for yourself, at www.theblackboxstore.com.

Air Costa realises an operating profit

11 Sunday Jan 2015

Posted by theflyingengineer in Air Costa, Airline, General Aviation Interest

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Air, Costa, profit

Air Costa, the Vijayawada based regional airline, has realized an operating profit in the month of December, 2014.

ATF sales tax at Andhra Pradesh, which was reduced to 1% from 16%, has positively benefited the airline. Three out of four aircraft rotation patterns have at least one stop at Andhra Pradesh, which allows the airline to tanker fuel out of the state. The Embraer E170s, which used to pay a flat sales tax of 4%, now pay only 1% within the state and 4% outside the state.

The airline’s tie up with Sovika Group to carry a target of 500 tonnes of cargo a month in the unused belly space of the aircraft has also contributed to the airline’s revenue stream via ancillary revenues starting December. It is estimated that the airline makes around INR 1 Cr per month for 500 tonnes of cargo.

The airline flies 34 flights a day between 15 city pairs, connecting 9 stations with four Embraer E Jets – two 112 seat E190s and two 67 seat E 170s. Of these, the airline enjoys a monopoly on three pairs: Jaipur-Chennai, Tirupati – Vishakhapatnam, and Vijayawada-Vishakhapatnam sectors, and a duopoly on five others. On the other sectors, the airline enjoys competition from just two other airlines. Two out of 15 routes are Tier II – Tier II city pairs, while just two city pairs are Tier I – Tier I. The other 11 are Tier I – Tier II city pairs : the market that has the highest growth potential. The airline stopped flying the Bangalore- Chennai sector – a short, crowded sector that is not suited for a 100 seat regional jet in the light of stiff competition especially from economical 70-80 turboprops and higher capacity Boeing 737-800 and A320 aircraft. While the turboprop is the right sized aircraft with favorable economics, for jet aircraft, this sector is unviable. However, deploying a Boeing 737-800 or an A320 on this sector can be commercially managed through low airfares that fill up an entire aircraft to break even. The E190 cannot compete due to its very significantly higher operating costs than an turboprop and its higher cost per seat compared to a mainline jet, on such a short, already crowded sector.

The network has been restructured to eliminate unprofitable routes and unfavourable patterns.

It is also possible that the disruptions faced by SpiceJet across its network could have benefited Air Costa. The airline shares two duopoly sectors with SpiceJet and three other sectors with SpiceJet and other airlines.

Another important factor that would have contributed to Air Costa’s profit is the high demand for domestic air travel in December. Tirupati, for instance, is preferred by many in December due to the favorable weather and the coincidence with the holiday season.

Route Deletions

When compared to the 2014 Summer schedule, the airline has stopped flying five city pairs and added four city pairs. The most notable change has been in the drop in the number of Chennai connections. Connections to Chennai from Coimbatore, Bangalore, and Vijayawada have been snapped. Madurai as a destination was dropped soon after opening. The connection between Hyderabad and Jaipur has been snapped. The frequency of flights between Hyderabad and Chennai have dropped from 3 flights a day each way to just one.

Route Additions

Tirupati was opened towards late September. Direct Hyderabad – Coimbatore, Hyderabad – Tirupati, and Tirupati – Visakhapatnam sectors were commenced, and the Hyderabad – Vijayawada frequency was doubled.

Route Modifications

Air Costa has stopped its three / four way routes : Bangalore – Jaipur – Hyderabad – Chennai (and the return), and Bangalore – Ahmedabad – Chennai (and the return), replacing these with direct Bangalore – Jaipur-Bangalore, Bangalore – Ahmedabad – Bangalore, Chennai – Ahmedabad – Chennai, and Chennai – Jaipur – Chennai routes.

Flights & Utilisation

From 40 planned flights a day in summer ’14, the airline today flies 34 flights a day, dropping routes that were unprofitable.

Compared to the Summer schedule, the aircraft utilisation has dropped, from an average of 12:53hrs to 11:42hrs per aircraft, a drop of 1:11hrs. E170s, which were planned for 11:00 -11:25hrs in summer presently are utilised to 9:45hrs-10:00hrs a day. E190s, which were planned for 14:30hrs -14:40hrs a day in summer today fly for 12:50hrs – 14:15hrs.

Chennai, from 10 departures a day as per the summer’14 schedule, has reduced to just three. Bangalore and Hyderabad have the highest departures – seven a day. It may be prudent for Air Costa to shift its E190 aircraft base from Chennai to Bangalore both in light of its importance and the benefits handed out by Bangalore Kempegowda International Airport for operators who station 50% or more of their fleet in the city and fly more than a million passengers annually through the airport.

Presently, Air Costa flies a total of about 26,000 passengers into and out of Bangalore, every month. The E190s contribute to about 17,500 passengers per aircraft per month. Should 4 additional E190s be stationed at Bangalore to fly point to point routes out of Bangalore, then the airline will cross 1 million passengers movements per annum at Bangalore.

According to earlier plans, the airline was to have received the 5th E190 (7th aircraft) in December 2014.

Fly Easy – A possible regional startup

04 Thursday Dec 2014

Posted by theflyingengineer in General Aviation Interest

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Tags

ABC, Bangalore, Easy, Finn, Fly, Regional, Thaulow

Update: A new piece on this airline was brought out on 10th July 2015. Click Here to read the update.

Fly Easy (India), the brand name of a Bangalore based regional airline proposed to be started by ABC Aviation and Training Services Private Limited, has called for applications for positions in ten departments in the company.

The startup-airline company had received its initial NOC (No Objection Certificate) from the aviation ministry on the 18th of January, 2012. This is five days earlier than Air Costa’s first NOC which was issued on the 23rd of January, 2012.

The initial NOC is valid for a period of 18 months, and must be renewed every six months thereafter to maintain its validity. The airline is presently in its third (3rd) renewal, and will have to apply for its fourth (4th) renewal on the 23rd of January 2015.

The airline may apply for its AOP during its 5th renewed NOC period, if all goes as per plan. However, it is uncertain if the airline has sufficient funds to start operations.

The airline reportedly has an authorised capital of INR 12 Crores. This would have been just sufficient (only to meet regulatory requirements, insufficient for operations though) to start an airline with aircraft such as the E170 and E175. However, for an airline that plans to fly the E190s (or heavier aircraft), the regulatory requirement is a minimum paid up capital (not authorized capital) of INR 30 Crores minimum. The airline’s reported authorized capital is not in agreement with the airline’s plans to fly E190 aircraft.

As of today, the airline aims for a regional scheduled operator’s permit for the Southern Region – the most lucrative region for regional operations in the country. Earlier news reports had indicated Guwahati, Amritsar and Surat as ‘priority’ destinations. The airline indicates its plans to have a fleet of Embraer E-190 aircraft. Such aircraft will help any airline tap long, thin markets that are either underserved or virgin. Aircraft with the range and capacity of an Embraer E190 (a little more than 100 seats – 112 in the case of Air Costa) gain prominence in the light of the saturation and focus of/on mature markets – Tier I routes and certain Tier III routes.

The airline’s website is up, and the brand colours, design and theme are perhaps the best amongst startup regional airlines in the country.

The airline company has an office at Bangalore’s Kempegowda International Airport’s Alpha 3, though the company is registered at Trivandrum, at an area just south-east of Trivandrum international airport.

The airline company has four directors – Rafi Sainulabdeen Mohammed, Rajesh Ebrahimkutty Majidha Beevi, Sanaulla Zulfiqar Ahmed Khan and a ‘Rajesh’.

As per the airline’s website, the CEO is Finn Thaulow. It is uncertain whether he is the CEO or still a CEO-designate. The approximately 60 year old Norwegian CEO was formerly with FlyMe Europe, and Syrian Pearl Airlines. During his tenure as CEO at FlyMe Sweden, the airline, which operated Boeing 737 Classics (-300 & -500), filed for bankruptcy in March 2007. The sudden closure affected numerous passengers who had purchased tickets from the airline.

In 2011, trial against FlyMe was initiated, in which the CEO, Finn Thaulow, along with three others were charged. Finn Thaulow was charged with ‘serious accounting fraud’, as reported by Gotheborg Daily- a Swedish Daily. Reportedly, the four accused ’emptied the company of 40 million kronor in the winter of 2006 through a fictitious transaction involving the purchase of shares in River Don Ltd’. At this moment, we have been unable to establish the result of the trial.

Syrian Pearl Airlines, which was founded in 2008, with Finn as the CEO, started operations in May 2009 with a BAe 146-300. The airline had entered into a ACMI (Aircraft, Crew, Maintenance, Insurance) agreement with Orion Air of Spain, concerning two BAe 146 aircraft, one of which it started operations with. According to the US Department of Commerce, the agreement was a breach of US export regulations. Finn had privately appealed against a temporary denial order (TDO), stating that it was Orion Air’s responsibility for ‘obtaining all necessary licenses and governmental approvals on Orion Air before sending the two BAE 146-300 aircraft to Syria’. The airline ceased operations three months after its commencement, when the lessor Orion Air pulled out due to the US sanctions imposed on it.

Finn Thaulow was on the shortlist for Tarom’s board of directors. Tarom is the flag carrier of Romania.

Prior to FlyME, Finn was the Vice President of Alliances and Corporate partners at SAS Scandinavian Airlines – the flag carrier of Sweden, Norway and Denmark. He was also part of Spanair’s management team. Spanair, which ceased operation in 2012, was a Spanish airline, and a subsidiary of the SAS Group during Finn’s engagement.

Finn has over 25 years of aviation experience, and that may immensely benefit the airline, should it take-off.