MANILA - A tussle between the Philippine government and a private German company over the construction of a US$425 million airport has exposed the legal risks for foreigner investors in the Philippines at a time President Benigno Aquino is seeking foreign funds to finance badly needed infrastructure spending.
A recent ruling by a United States arbitration court in favor of Germany's Fraport AG Worldwide Services Inc over the Philippine government has raised diplomatic tensions between Berlin and
Manila and could jeopardize future development assistance if Aquino's administration doesn't find soon an amicable solution to the business conflict.
The Washington-based International Center for Settlement of Investment Disputes (ICSID) handed down a decision in late December to reinstate Fraport's right to file an arbitration and compensation case against the Philippine government. The decision marked a reversal of a 2007 ICSID ruling that found Fraport had violated Philippine laws that cap foreign ownership of key investments, including airports, at 40%.
In a previous ruling, ICSID found that the Filipino firms working in a consortium with Fraport had entered into a secret shareholder agreement that would have allowed the German company to maintain managerial, operational and financial control over NAIA-3, or Terminal 3, of Manila's Ninoy Aquino International Airport, in compensation for Fraport's financing most of the project.
In 2004, the Supreme Court declared the original contract null and void because it exceeded the legal foreign ownership cap. The government subsequently seized the terminal in 2007 and partially opened the new airport facility the following year. It has since hosted several concessionaires, including popular budget airline Cebu Pacific, at the new terminal. The Fraport-led consortium, known as PIATCO, has sent eviction letters to the airlines for "illegally" using the terminal.
The contested project has dragged on for over a decade, long enough to span four different Philippine administrations. German Ambassador to the Philippines Christian-Ludwig Weber-Lortsch recently said the 42 million euros (US$52 million) lost through a partial investment guarantee for the project is the biggest loss the federal German government has incurred in decades.
He claimed that the government cannot legally operate the terminal because it was privately funded and that the issue has dampened broad foreign investor sentiment towards the Philippines, particularly among Europeans. "It is a matter or credibility. You need to be sure what you signed will be honored," he said.
The saga has clouded Aquino's pitch to foreign investors to help finance new public infrastructure projects. He promised during a road show last year to promote public-private partnership development schemes that he would ensure a level playing field for foreigners and that the Philippines would be more foreign investor friendly under his watch.
Faced with perennial fiscal shortfalls, the Philippines needs lots of private funds to finance infrastructure spending and propel economic growth to its target rate of between 8% to 10%, a clip experts say is needed to reduce endemic poverty. Current infrastructure spending in the Philippines represents less than 3% of gross domestic product (GDP), well below the 5% average in other Asian countries.
The World Bank recently estimated that the Philippines needs some US$35 billion to $45 billion in fresh investments from the private sector to improve its infrastructure over the next 10 years, including upgrades for the country's aging and often decrepit airports. Domestic air traffic at NAIA is expected to reach 40 million passengers by 2017, double the 20.5 million passengers who flew in 2007, according to the Airport Council International, a global association of airport operators.
Investments are also needed to restore foreign confidence in Philippine aviation. In 2007, the US Federal Aviation Authority's International Aviation Safety Assessment downgraded the country's aviation ratings from Category 1 to Category 2 due to safety concerns of its airlines. Former Senator Mar Roxas II later estimated that the downgrade cost the country hundreds of millions of dollars in lost investment and tourism, mostly from the US and Europe.
Political contract
The PIATCO consortium won the NAIA-3 deal in 1997 during the administration of president Fidel Ramos. Fraport, which manages the Frankfurt airport, later joined in 1999 during the time of president Joseph Estrada. The contract was canceled in 2002 by president Gloria Macapagal-Arroyo on the vague grounds that it was disadvantageous to the government. The cancellation triggered legal cases in the Philippines and abroad that have now dragged on for almost a decade into the Aquino administration.
Under Aquino, the Justice Department recently announced that it has recommended the filing of criminal charges against Fraport and PIATCO officials. It claimed in its recommendation that Fraport used front companies, or dummies, to circumvent the foreign ownership limit law, known here as "anti-dummy" laws. It also said Fraport admitted during ICSID hearings that its direct and indirect stakes in PIATCO had reached 61%.
PIATCO officials responded in a statement saying that the Aquino government's lawyers are in "cahoots with their favored business personalities" and that "it will use the anti-dummy charge as its last card". The PIATCO statement, signed by Moises Tolentino Jr, vice president for legal and administrative affairs, did not give specific names.
However, it is known in industry circles that the original proponent and losing bidder for the project was a consortium composed of some of the country's top tycoons, including mall magnates John Gokongwei and Henry Sy, banking tycoon Alfonso Yuchengco, real estate mogul Andrew Gotianun and Philippine Airlines' owner Lucio Tan - some of whom are known corporate allies with the Aquino administration.
Meanwhile, German ambassador Lortsch said that he had privately asked the Aquino administration to "facilitate a legal, fair and timely solution" and that Berlin preferred an out-of-court settlement to the conflict. He suggested that a negotiated settlement "would help boost the credibility of the administration and the economy".
In comparison, Lortsch noted that the late president Corazon Aquino, Benigno's mother, honored the international debts incurred during the disgraced Ferdinand Marcos regime - a not-so-veiled suggestion that Aquino should restore the terms of the original contract brokered under Ramos.
The airport dispute has affected the provision of German soft loans for the Philippines, including funds earmarked earlier for combating HIV/AIDS, malaria and tuberculosis.
Lortsch downplayed reports in the local media that Germany was also reconsidering other financial assistance to the Philippines, including ongoing development and environment projects in Mindanao, to pressure the government over the dispute. Either way, bilateral relations and Aquino's credibility with foreign investors is sinking fast.
Joel D Adriano is an independent consultant and award-winning freelance journalist. He was a sub-editor for the business section of The Manila Times and writes for ASEAN BizTimes, Safe Democracy and People's Tonight.
2. Mayor Amante hopeful of Butuan’s full recovery after the calamity
Following the sporadic floods experienced by Butuan brought about by the heavy rains during the first week of January, Mayor Ferdinand M. Amante Jr. is thankful that the city was able to withstand the threat and is now on the road to full recovery.
In fact, he stressed that it tests the readiness of the city in times of calamities and he is very grateful for the support of all line agencies and stakeholders for their dedication to help the people especially those belonging to the marginalized sector.
In his meeting with President Benigno Simeon C. Aquino III on January 14 of this year, at the Civil Aviation Authority of the Philippines (CAAP) Office, Bancasi, this city, he was assured of the national government’s commitment to assist in the rehabilitation of the city as well as the support for all developmental endeavors in building for a stable and economically-viable city.
The President visited the city to see the damages brought about by the said calamity and Mayor Amante personally apprise the President of the extent of the damage, particularly the agricultural sector, affecting most of the 59 rural barangays. During the President’s visit, he turned-over initial relief goods to assuage the concerns of the farmers over the state of their fields with the following items: 50 bags of certified seeds; 3 units water pump engine sets; 2 boxes assorted vegetable seeds; requisition and issue slip for 1 set of assorted medicines and medical supply.
It is of great significance that the President personally evaluated the damages brought about by the bad weather condition which unfortunately affected many areas in Visayas and Mindanao and he is thankful to note that among all the areas in Caraga region, Butuan City is the least hit by the calamity.
The President lauded the efforts of the local government of Butuan for its disaster management readiness in its immediate response to control or lessen the impact of the damages, brought about by the calamity.
Mayor amante assured all Butuanons especially those who were affected by the calamity that the local government will continue to assist them and extend help in whatever means possible until the city will fully recover.
The goods and items received for the mitigation program will be given to the respective departments or offices for distribution to the identified beneficiaries.
3. DOTC chief says 'Category 1 status within reach'
MANILA, Philippines – “We are leaving no stone unturned in getting back our Categoy 1 status,” declared Secretary Jose P. De Jesus of the Department of Transportation and Communications as he keynoted the 2nd Philippine Aviation Summit held at the Main Function Hall PAF Aerospace Museum Col. Jesus Villamor Airbase Pasay City, on Jan. 19, 2011.
In a speech read for him by DOTC Undersecretary Glicerio Sicat, Secretary de Jesus said only two key remaining items remain to be accomplished for Philippine aviation to get back to its Category 1 status – and thus enable Philippine carriers to expand routes in the United States and to be allowed once again to land on European soil.
“We are leaving no stone unturned in improving, upgrading, expanding and modernizing all aspects of Philippine aviation,” the secretary pointed out.
“The good news is that we are only a few steps away from getting back our Category 1 status,” De Jesus said.
De Jesus also cited a feasibility research entitled “Greater Capital Region Airport Rationalization Study” on a planned integration of operations of the NAIA in Metro Manila and the Diosdado Macapagal International Airport (DMIA) in Clark, Pampanga.
The scope of the study includes three key areas: analysis of issues on airport development in Metro Manila, formulation of an optimum airport security plan; and preparation of a development plan for DMIA and NAIA.
He added that the aviation sector is being geared up “for the next challenge which is the Open Skies policy that may govern our flying community whether in its pure or altered form.”
The Transportation chief also said changes in the aviation sector include strengthening the Civil Aviation Authority of the Philippines (CAAP) by separating its operational functions from its regulatory duties, resulting in “efficient, responsive, and even caring airport operations.”
“It is a maxim of good governance that the functions of regulation shall be distinct and separate from the purely operational in order to install a built-in check-and-balance system within one sector,” the secretary stressed.
De Jesus recently appointed seven aviation professionals to key posts in the CAAP while its database undergoes modernization “for easy access and retrieval” of vital information about Philippine aviation.
The package of reforms unwrapped by De Jesus during the aviation conference also consisted of the commissioning of the Ninoy Aquino International Airport Terminal 3 (NAIA3) for full commercial operations by yearend, and the construction or rehabilitation of many more international airports nationwide.
Underscoring the government’s thrust in developing further the country’s civil aviation sector, De Jesus described the projects he cited as “notable examples of our earnest and vigorous initiatives to build new international airports, to upgrade or modernize existing ones, and to pursue a sustainable program of airport improvements.”
4. Big loss to Philippine civil aviation
IF THERE’S one government official from the Arroyo administration who was not tainted with scandal, he is no other than former Manila International Airport Authority general manager Alfonso Cusi.
IF THERE’S one government official from the Arroyo administration who was not tainted with scandal, he is no other than former Manila International Airport Authority general manager Alfonso Cusi. That’s why it really saddened me to read in the Inquirer’s Dec. 22, 2010 issue that Cusi had ended his principled stand by irrevocably resigning as head of the Civil Aviation Authority of the Philippines (CAAP).
Nobody, not even President Aquino, could have forced Cusi to resign as the post of CAAP director general carries with it a fixed term. But resign Cusi did because he figured that with all the political pressures put on him, he would only be half-effective in completing the much-needed reforms he had started at CAAP. It proved too much for Cusi that the Department of Transportation and Communication and the CAAP board violated no less than the charter of the CAAP by ramming the appointment of seven people to key posts at CAAP.
Thrown to the dogs by the DOTC, the CAAP and even the Civil Service Commission, which approved the appointments, was the rule of law and, along with it, the independence and autonomy of CAAP. Indeed, the CAAP is back to square one as the favorable pre-audit report from the European Union which it had generated for Philippine civil aviation under Cusi is now meaningless.
No, make that: The CAAP has reverted to its former self, the Air Transportation Office (ATO). Lest we forget, it was the ATO which earned for the country a downgrade from the US Federal Aviation Authority (FAA) because it was turned into a repository of unqualified political appointees.
CAAP, unlike ATO, was supposed to be independent of the DOTC. But whatever happened to that independence and how come the DOTC just put in seven people at CAAP, in utter disregard of CAAP rules and procedures?
What was done to ATO is now being done as well to CAAP. So heaven help us when the FAA and the ICAO audit Philippine civil aviation anew. From being downgraded to category 2, we might find ourselves downgraded further, which would result in our planes being not allowed to fly to many countries and foreign-owned planes limiting their flights to the Philippines.
Cusi can always return to the private sector or make a run for Congress in the next elections. His resignation was a big loss not for him but for the CAAP and Philippine civil aviation.
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http://canadaaviationnews.blogspot.com/31
1. Canada's user-pay system fairer than U.S. airport subsidies
Canada has chosen a different economic model for its air travel industry than that of the U.S. In Canada, the user-pay system is applied and taxpayers do not support the industry through general revenues.
Starting in the late 1980s, Canada commercialized its airports and air navigation system (both not-for-profit organizations now) and deregulated the domestic market to promote efficiency of these entities and ensure they better met their stakeholder needs. Also, Canada's air carriers are private companies.
The government believes these decisions have been the right ones. Our airports are relatively congestion-free, many have won awards for customer satisfaction, and the Canadian Air Navigation Services provider (Nav Canada) is considered a world-class model that has also won international awards.
Our air carrier industry is getting stronger and, as proof, has weathered many recent socio-economic crises. Finally, despite recent challenging economic times, passenger traffic in Canada is increasing.
On many flights, the majority of taxes and surcharges are imposed by airlines and other non-government entities, along with the U.S. government. The only charges imposed by the Canadian federal government are the goods and services/ harmonized sales taxes, the air travellers security charge, fuel excise tax (on domestic flights only) and airport rent, which account for a very small percentage of the cost of a ticket.
As for the various airline-imposed charges, this is now the industry norm and is not unique to Canada. In addition, airport improvement fees are becoming more prevalent internationally. Airlines have battled through tough times for the past 10 years and are now trying to remain viable through a variety of pricing strategies, as would any corporation.
It is worth pointing out that there is more to a passenger's decision on which airport to use than just cost. There is also convenience and choice of routes. Many Canadians live closer to U.S. airports than they do to Canadian airports. These U.S. airports are served by low-cost carriers that choose to access smaller U.S. airports.
In addition, our relatively strong dollar has lowered the cost of buying air services in the U.S. for Canadians.
Comparing the Canadian and U.S. systems requires caution, as market size and the respective roles of governments also differ significantly. A sizable portion of the U.S. system relies on support from all levels of government.
Most airports are state or municipally operated. General tax revenues are also regularly used to help fund aviation security and air navigation services, which places a greater burden on the taxpayer.
Despite this greater level of government support, the U.S. infrastructure and air navigation system are falling behind, U.S. airlines regularly seek bankruptcy protection and there are significant congestion delays throughout the system.
We are committed to helping maintain competitiveness in the Canadian air industry and actively monitor concerns.
Chuck Strahl is the federal minister of Transport, Infrastructure and Communities.
2. Star Alliance adds upgrade awards for Air Canada, US Airways
Members of Star Alliance partners – including Air New Zealand, Singapore Airlines, United and Asiana – can now trade their points for upgrades on flights with Air Canada and US Airways.
Although already members of Star Alliance, the Canadian and US carriers had yet to sign up to the Upgrade Awards program which allows members of other Star Alliance airlines to trade their points in for an upgrade when travelling on an Air Canada or US Airways flight.
Upgrades are permitted for one class of travel, either from economy class to business class or from business class to first class (if first is available on that flight), although upgrades from some heavily-discounted fares are not permitted.
No mention is made of premium economy, which is an increasingly popular cabin class among airlines, so if you're flying economy on a Star partner which also offers a premium economy cabin you should check with the airline about your upgrade award options.
"Our frequent flyers have always told us that upgrading using miles across the entire alliance is one of the highest sought after benefits" said Star Alliance vice-president Christopher Korenke. "We are working on getting the remaining Star Alliance member carriers into the product as soon as possible."
Frequent flyers have often been frustrated by the inability to use one airline's points to upgrade when flying on another airline belonging to the same alliance.
For example, no matter how many Qantas Frequent Flyer points you have or how high your status is, you can't use your Qantas points to upgrade a ticket on a British Airways flight – despite the fact that both belong to the same OneWorld alliance, and even if your BA flight is codeshared with Qantas.
In other words: you buy a BA economy seat and you're stuck with it, whereas on most Star Alliance airlines you can now bump up one class depending on seat availability.
3.Canadian airline to begin JWA nonstop service
Canadian low-cost airline WestJet announced Tuesday that it will begin nonstop service from Vancouver and Calgary to John Wayne Airport in May and June, according to a news release from WestJet.
These are the first nonstop international destinations to be added since Air Canada ended its JWA service to and from Toronto in October.
The Orange County Board of Supervisors, which oversees the airport, approved the WestJet flights in December.
4. American Airlines Assists Customers Affected by Weather in Midwest
Due to the anticipated weather impact on the Midwestern United States, American Airlines offers customers the convenience to change their plans. Customers ticketed to travel on American Airlines, American Eagle or AmericanConnection flights to, from or through the airports listed below may change flights as shown without penalty.
If you are traveling to/from/through those cities on Jan. 31-Feb. 2 and your ticket was issued no later than Jan. 30, you may begin travel as late as Feb. 6.
Bloomington/Normal, Ill. (BMI)
Cape Girardeau, Mo. (CGI)
Cedar Rapids, Iowa (CID)
Champaign, Ill. (CMI)
Chicago (ORD)
Des Moines, Iowa (DSM)
Detroit (DTW)
Dubuque, Iowa (DBQ)
Evansville, Ind. (EVV)
Fort Leonard Wood, Mo. (TBN)
Fort Wayne, Ind. (FWA)
Grand Rapids, Mich. (GRR)
Joplin, Mo. (JLN)
Kalamazoo/Battle Creek, Mich. (AZO)
Kansas City, Mo. (MCI)
Kirksville, Mo. (IRK)
Manhattan, Kan. (MHK)
Marion, Ill. (MWA)
Milwaukee (MKE)
Moline/Quad Cities, Ill. (MLI)
Northwest Arkansas, Ark. (XNA)
Oklahoma City, Okla. (OKC)
Peoria, Ill. (PIA)
Quincy, Ill. (UIN)
St. Louis (STL)
Springfield, Ill. (SPI)
Springfield, Mo. (SGF)
Traverse City, Mich. (TVC)
Tulsa (TUL)
Wichita, Kan. (ICT)
One ticket change is allowed with no penalty.
To change travel dates, contact American's Reservations personnel at 1-800-433-7300 within the U.S. or Canada. If you are calling from outside the U.S. or Canada, please check our Worldwide Reservations Numbers page on AA.com.
About American Airlines
American Airlines, American Eagle and AmericanConnection® serve 250 cities in 40 countries with, on average, more than 3,400 daily flights. The combined network fleet numbers more than 900 aircraft. American's award-winning AA.com® website provides users with easy access to check and book fares, plus personalized news, information and travel offers. American Airlines is a founding member of the oneworld® Alliance, which brings together some of the best and biggest names in the airline business, enabling them to offer their customers more services and benefits than any airline can provide on its own. Together, its members serve approximately 750 destinations in nearly 150 countries and territories. American Airlines, Inc. and American Eagle Airlines, Inc. are subsidiaries of AMR Corporation. AmericanAirlines, American Eagle, AmericanConnection, AA.com, We know why you fly and AAdvantage are trademarks of American Airlines.
By
NEHA JAIN
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Members of Star Alliance partners – including Air New Zealand, Singapore Airlines, United and Asiana – can now trade their points for upgrades on flights with Air Canada and US Airways.
Although already members of Star Alliance, the Canadian and US carriers had yet to sign up to the Upgrade Awards program which allows members of other Star Alliance airlines to trade their points in for an upgrade when travelling on an Air Canada or US Airways flight.
Upgrades are permitted for one class of travel, either from economy class to business class or from business class to first class (if first is available on that flight), although upgrades from some heavily-discounted fares are not permitted.
No mention is made of premium economy, which is an increasingly popular cabin class among airlines, so if you're flying economy on a Star partner which also offers a premium economy cabin you should check with the airline about your upgrade award options.
"Our frequent flyers have always told us that upgrading using miles across the entire alliance is one of the highest sought after benefits" said Star Alliance vice-president Christopher Korenke. "We are working on getting the remaining Star Alliance member carriers into the product as soon as possible."
Frequent flyers have often been frustrated by the inability to use one airline's points to upgrade when flying on another airline belonging to the same alliance.
For example, no matter how many Qantas Frequent Flyer points you have or how high your status is, you can't use your Qantas points to upgrade a ticket on a British Airways flight – despite the fact that both belong to the same OneWorld alliance, and even if your BA flight is codeshared with Qantas.
In other words: you buy a BA economy seat and you're stuck with it, whereas on most Star Alliance airlines you can now bump up one class depending on seat availability.
3.Canadian airline to begin JWA nonstop service
Canadian low-cost airline WestJet announced Tuesday that it will begin nonstop service from Vancouver and Calgary to John Wayne Airport in May and June, according to a news release from WestJet.
These are the first nonstop international destinations to be added since Air Canada ended its JWA service to and from Toronto in October.
The Orange County Board of Supervisors, which oversees the airport, approved the WestJet flights in December.
4. American Airlines Assists Customers Affected by Weather in Midwest
Due to the anticipated weather impact on the Midwestern United States, American Airlines offers customers the convenience to change their plans. Customers ticketed to travel on American Airlines, American Eagle or AmericanConnection flights to, from or through the airports listed below may change flights as shown without penalty.
If you are traveling to/from/through those cities on Jan. 31-Feb. 2 and your ticket was issued no later than Jan. 30, you may begin travel as late as Feb. 6.
Bloomington/Normal, Ill. (BMI)
Cape Girardeau, Mo. (CGI)
Cedar Rapids, Iowa (CID)
Champaign, Ill. (CMI)
Chicago (ORD)
Des Moines, Iowa (DSM)
Detroit (DTW)
Dubuque, Iowa (DBQ)
Evansville, Ind. (EVV)
Fort Leonard Wood, Mo. (TBN)
Fort Wayne, Ind. (FWA)
Grand Rapids, Mich. (GRR)
Joplin, Mo. (JLN)
Kalamazoo/Battle Creek, Mich. (AZO)
Kansas City, Mo. (MCI)
Kirksville, Mo. (IRK)
Manhattan, Kan. (MHK)
Marion, Ill. (MWA)
Milwaukee (MKE)
Moline/Quad Cities, Ill. (MLI)
Northwest Arkansas, Ark. (XNA)
Oklahoma City, Okla. (OKC)
Peoria, Ill. (PIA)
Quincy, Ill. (UIN)
St. Louis (STL)
Springfield, Ill. (SPI)
Springfield, Mo. (SGF)
Traverse City, Mich. (TVC)
Tulsa (TUL)
Wichita, Kan. (ICT)
One ticket change is allowed with no penalty.
To change travel dates, contact American's Reservations personnel at 1-800-433-7300 within the U.S. or Canada. If you are calling from outside the U.S. or Canada, please check our Worldwide Reservations Numbers page on AA.com.
About American Airlines
American Airlines, American Eagle and AmericanConnection® serve 250 cities in 40 countries with, on average, more than 3,400 daily flights. The combined network fleet numbers more than 900 aircraft. American's award-winning AA.com® website provides users with easy access to check and book fares, plus personalized news, information and travel offers. American Airlines is a founding member of the oneworld® Alliance, which brings together some of the best and biggest names in the airline business, enabling them to offer their customers more services and benefits than any airline can provide on its own. Together, its members serve approximately 750 destinations in nearly 150 countries and territories. American Airlines, Inc. and American Eagle Airlines, Inc. are subsidiaries of AMR Corporation. AmericanAirlines, American Eagle, AmericanConnection, AA.com, We know why you fly and AAdvantage are trademarks of American Airlines.
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SATURDAY, JANUARY 29, 2011
http://indianairlinesnews.blogspot.com/29
1. Bombardier didn't lose out to Airbus on massive Indian order.
MONTREAL - Bombardier's new CSeries planes didn't lose out to rival Airbus when an Indian discount carrier announced what could be the largest potential order in aviation history, Bombardier CEO Pierre Beaudoin said Friday.
Discount carrier IndiGo has signed a preliminary agreement to purchase 180 Airbus aircraft valued at US$15.6 billion.
But Beaudoin said Bombardier doesn't have a product large enough to compete with the Airbus A320, or its re-engined A320 neo.
"We don't make an airplane in this category so you can't win something if you don't have a product," Beaudoin said in an interview with an Indian television station in Davos, Switzerland.
IndiGo plans to configure the plane with more than 170 seats. The largest CSeries will have a maximum of 149 seats.
Nonetheless, Beaudoin said Montreal-based Bombardier is determined to tap into the massive growth of commercial aviation in India by selling its commercial planes, including the new CSeries.
"We think there's a huge market in India because (the CSeries) consumes 20 per cent less fuel than the best airplane on the market today and, given that fuel is so expensive in India, airlines will have a great benefit."
The CSeries will eventually compete with the smaller A319, which can be configured with 124 to 156 seats.
He said the Indian market should grow by more than 20 per cent a year. But the need to accommodate the dramatic growth is now pushing officials to develop sufficient air traffic control and airport infrastructure.
"So I think it's going to be a good period for Indian airlines."
Bombardier (TSX:BBD.B) has forecast India will take delivery of 600 commercial planes over the next 20 years in the 20- to 149-seat category and that India will account for 36 per cent of deliveries to the Asia-Pacific region, excluding China, during the period.
The addition of new regional airports are a great opportunity for Bombardier's Q400 turboprops. They can serve smaller runways, are 30 per cent more fuel efficient than jets and can allow airlines to increase the frequency of their service, he added.
2. SpiceJet Focused on India for Now
SINGAPORE–SpiceJet Ltd., the first Indian low-cost carrier to receive permission to fly abroad, is going slow on adding international routes and instead plans to focus on putting smaller cities on the flight map, where it sees greater growth opportunity.
To cater to the growing demand for aviation in India, SpiceJet will lease seven Boeing 737-800 planes in 2012 and another eight in 2013 as it awaits deliveries of 30 more aircraft on order starting in 2014, Chief Commercial Officer Samyukth Sridharan said in an interview on the sidelines of a low-cost airlines conference in Singapore.
"In 2012 calendar and 2013 calendar, we don't have a scheduled delivery [for Boeing aircraft]. We have locked in positions with lessors to ensure that we'll continue to grow at seven to eight planes a year," he said. The airline's fleet will rise to 32 by the end of the year from 25 at present.
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Agence France-Presse/Getty Images
A SpiceJet aircraft prepared for takeoff in Mumbai
In July 2010, SpiceJet placed a $2.7 billion order for 30 737-800 single aisle planes from Boeing Co., which will be delivered from 2014 through 2019. The airline will receive four Boeing jets this year, completing deliveries from an earlier order for 30 planes.
SpiceJet aims to raise its fleet to 72 aircraft and operate 500 daily flights by 2013, Mr. Sridharan said.
SpiceJet, which started flights to Kathmandu and Colombo last October, is planning to add more flights to these destinations but plans to stay in India's immediate neighborhood for now. It is also looking at Dhaka and Male as possible destinations.
"We are not fussed about flying international. We see massive opportunity for growth in India," Mr. Sridharan said.
Rival IndiGo, the country's biggest budget carrier by market share, received government permission to fly overseas on Jan. 19 and is planning to start flights to Singapore, Bangkok, Dubai and Muscat starting August.
Earlier this month, IndiGo placed a $15.6 billion order for 180 A320 aircraft from Airbus, the single biggest in aviation history. Airbus says the deal is the largest-ever jet order in terms of number of planes and one of the biggest by value.
SpiceJet says it prefers to be more conservative.
"We've always said that we are not out to fly international for the sake of flying international. If you look at some of my competitors from here, look at the capacity they've pulled out," Mr. Sridharan said. Southeast Asian carriers Tiger Airways Holdings Ltd. and AirAsia Bhd have withdrawn flights to some southern Indian cities in recent months.
SpiceJet is buying smaller aircraft to start flights from smaller Indian towns where air traffic is likely to rise between 25% and 27% each year, outpacing the six metropolitan cities that are likely to continue their 11% growth, he said.
India's air traffic is expected to reach 180 million passengers by 2020, compared with an estimated 70 million in the year through March.
The company placed a $446 million order for 15 Q400 NextGen turboprop aircraft from Bombardier Inc.'s aerospace unit late last year and has options to buy another 15, which Mr. Sridharan said the company is likely to exercise.
Deliveries of the Q400s will start in June this year and all 15 will come in by June 2012. After the first five aircraft are delivered, SpiceJet has to indicate if it wants the 15 planes on which it has options, Mr. Sridharan said.
"We want some time to see it work before we exercise the options. It will give us four to five months, which is good enough for us to figure it out and its gives us the flexibility in terms of timing our future deliveries," he said.
If the options are exercised, the order value will rise to as much as $915 million, the Montreal-based transportation-equipment conglomerate said on Dec. 9.
SpiceJet, which is based in Gurgaon, near New Delhi, is recruiting 200 pilots for the new airplanes, Mr. Sridharan said.
SpiceJet on Thursday reported a 13% fall in its October-to-December quarter net profit to 944.5 million rupees, missing analysts' estimates, after it incurred a one-time charge of 235 million rupees as income tax.
3. Eighth Aero India 2011 - International Seminar to be held in Bangalore
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The eighth Aero India 2011 - International Seminar conducted will held at National Institute of Mental Health and Neuro Sciences (NIMHANS) Convention Centre here from February 7 to 9, as a prelude to the 'Aero India 2011 Exposition'.
The seminar, organized by the Defence Research and Development Organization (DRDO) in association with the Aeronautical Society of India, will be inaugurated on February 7.
The seminar is likely to be attended by over 800 delegates both from India and abroad, from aerospace industry, R and D institutions, academic institutions including students, besides delegates from the armed forces and DRDO laboratories.
"While indigenization is necessary for the progress of the nation, collaboration and co-operation in development and production would speed up the realization of the products and help in reducing the costs", stated Dr Vijay Kumar Saraswat, Scientific Advisor to Raksha Mantri and Secretary Department of Defence Research and Development during a press meet at ADE Bangalore.
"Self Reliance need to be redefined in terms of contemporary Global Economic Scenario," he added describing aviation as the industry of millennium with a phenomenal growth.
The theme of the seminar "Aero and Space Technologies, Success through Global Co- operation" has been selected keeping in mind the global scenario.
A total of 64 papers would be presented in the seminar including 38 speakers from abroad.
The speakers include the CEOs and Technologists from leading companies such as Eurojet, Boeing, Hindustan Aeronautics Limited, SAAB, Goodrich, Professors from Indian Institute of Science, MIT USA, Scientists from DRDO, CSIR, and BEL.
Contemporary and emerging technologies will be discussed during the seminar.
The star attraction of DRDO/ADA's participation in the Airshow, Aero India - 2011 are the flight displays of Tejas Light Combat Aircraft, Aerostat and live exhibits of Unmanned Aerial vehicles. (ANI).
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