Newsletter #8

RepAIR India

There seems to be no end to the buzz around Air India. We told you that something was afoot after Air India boss Ashwani Lohani lamented about the airline’s huge debt.  

Now, it turns out that the government is looking at exiting the airline totally after its think tank, Niti Aayog, has recommended its privatisation. Here are some of the details of the road map that the think tank has envisioned for the future of the airline:   

  • Writing off loans of around Rs 30,000 crore (AI has debt of around Rs 60,000 crore, of which a third is aircraft-related loans).

  • Transfer the aircraft-related loans and the working capital to the new owner, while taking care of half the liability.

  • Hive off the real estate assets, some of which are lucrative, into a separate company.

The aviation minister has said his ministry is studying the recommendation and the aviation secretary said the ministry will act on the recommendation in three months. 

But the junior minister said the government has a robust transformation plan for the airline, which includes a winning strategy to improve operational performance, corporate governance and management performance. So what is it going to be: privatisation or transformation? Confusing, right?

Privatisation or a stake sale is the only future that remains for the airline. Besides being led by bureaucrats who have no clue about aviation and the way most government institutions are run, when the need of the hour is nimble footed decisions, the Air India mess can be attributed to the huge plane order  when they should have been leased given the state of its finances; the ill-advised and badly executed merger its Indian offshoot and surrendering lucrative routes and schedules to foreign and Indian competitors.

The Central Bureau of Investigation has registered cases against unnamed officials of the aviation ministry and private individuals for these irregularities, committed by the previous government. 

Question is given the funk Air India is in and likely opposition from trade unions, will the government find a buyer.

Three Cheers

The Narendra Modi government has completed three years in office and there have been a raft of report cards on its performance. How did the aviation ministry fare? 

It is safe to say that the government ignored aviation for the first two years. Then two things happened: RK Choubey was named aviation secretary and Jayant Sinha junior aviation minister. 

Since then, the aviation ministry has worked efficiently and quickly. All the ‘achievements’ that the government has showcased -- the aviation policy, affordable flying, no-fly list, Digi Yatra and Air Sewa -- have happened in the past one year.  

Of course, no surprise that the government has also touted a fall in fares, even aircraft orders, all of which have happened despite its long neglect, as its achievements. The truth is while the frenzied action and attention of late are welcome, the fruits of its labour need time to be counted as achievements.

Jet, Set, Gone  

Jet Airways finally has a CEO. Vinay Dube, currently senior vice president, Asia Pacific with Delta Air Lines Inc, is the new chap at the top.

Dube comes with all the right credentials. He is an aviation veteran, with nearly three decades of experience, Delta is profitable and he played a key role in helping the airline expand in A-Pac.

Jet has been without a CEO since February 2016 when Cramer Ball quit. Dube will hopefully steady the ship at Jet, whose profit has dropped 91% despite a higher income due to costlier fuel, lower airfares, higher capacity and weak demand from the key Gulf region.

Dube’s appointment shows that Jet chairman Naresh Goyal is calling the shots at the airline now and its strategic partner Etihad has almost fully receded into the background.

Jet, meanwhile, has announced it will add a third daily Mumbai-Heathrow flight. Jet could be leveraging its recent deal with Virgin Atlantic at LHR, generating US connectivity there, and making the most, like Air India, of the laptop ban on US-bound flights from the Middle East. 

The bad news is that The Trump administration may expand a current laptop ban to cover all international flights to and from the US, according to the head of the US homeland security.

Virtual World

Control towers at airports are a common sight. But a number of airports are shuttering them and switching to using remote centres to look after flights.  

The virtual centres are housed inside ordinary buildings, located several kilometers from the airports. They receive a live video feed from cameras positioned around the airfield to create a “virtual” image of the airport to be displayed on large screens positioned around the controllers’ desks.  

The virtual towers are cheaper and improve safety. A typical control tower costs millions. A virtual tower provides controllers with better view, especially at night and in poor visibility.

Now, A Russian Plane  

After China, Russia too has joined the aircraft race with an airliner that is designed to compete with Boeing 737s and Airbus A320s, the most popular planes in the world. 

The Irkut MC-21 is Russia’s first large airliner since the fall of the Soviet Union. It launched its maiden flight last Sunday.

Size Matters

Microsoft co-founder Paul Allen has launched the world’s biggest plane. The Stratolaunch  boasts a 117-metre wingspan, six engines and 28 wheels.  

It is not designed to carry humans, but launch satellites into orbit because launching the satellites on rockets while the Stratolaunch in flight saves plenty of fuel compared to sending them into orbit from a launchpad. 

While on size, let’s also talk about GE’s turbofan engine. It is humongous, as wide as a Boeing 737 fuselage. 

The engine has been built using lightweight carbon fiber and 3-D printing and will eventually power Boeing’s 777X, the biggest twinjet ever. Despite its size, it’s cleaner, quieter, and more fuel-efficient than its predecessors and flight-testing is due to start this year.

Bombardier's New Cabin Theme

Bombardier has a  new cabin interior for the Global 5000 and 6000, inspired by the high-end automotive industry. So the stress is on comfort and ergonomics. 

The seats feature soft, almost organic shapes with a higher backrest, giving better support to the shoulders and head. They have raised armrests to allow a more natural resting position, bearing more weight as a passenger shifts position. 

In the entrance galley and lavatories, there is the option of non-slip hardwood or natural stone tile flooring surfaces. The galley has revised straight cabinetry lines, allowing for slightly increased storage volume. 

Bombardier is clearly raising its game against competition. It nows offers hydraulic maintenance and repair services as part of its expanding MRO capabilities in the UK. 

The MRO operation based in Northern Ireland offers full inspection, testing, repair and overhaul of individual hydraulic components and hydraulic assemblies for Bombardier, Airbus and Boeing aircraft.