Cheers! Air passengers can heave a sigh of relief!!

2011 The Best Aviation Year; No accident at all!!
Air passengers can heave a sigh of relief. With so many ailments plaguing the airline industry the world over, here is a silver lining.

In a long time reckoned there was a not a single aviation accident throughout the year 2011 according to Ascend, which provides information to the aviation industry. There were 25 fatal accidents last year, just below the decade average of 26.6. But the burgeoning number of flights means the rate of such accidents—one per 1.52m flights—was the best ever, marginally beating 2009's rate of one per 1.51m.

The five worst accidents—two in Congo, two in Russia and one in Iran—were responsible for 250 deaths, a large portion of the year's total of 401. This was the equivalent of one death per 7.1m passengers, a much better rate than 2004 (previously the safest year on this metric), when there was one death per 6.4m passengers (and 434 total fatalities).
Paul Hayes, Ascend’s director of safety, said in a statement: "Airlines are getting safer—and more quickly than they’re expanding. On average, overall airline operations are now twice as safe as they were 15 years ago."
Such statistics will be of little comfort to the families of the victims, but it does appear that their awful experiences are becoming rarer.

from the pages of The Heyo Critiq Daily with inputs from The Economist

Ever heard of paying the pilots to complete a flight journey

Air passengers from Amritsar 'forced' to pay pilots to complete trip:
Passengers on board a flight from Amritsar said on Thursday they were forced to collect money on board the plane to fund the remainder of their trip back to Britain.
Those on board said they were "held to ransom" for 

six hours    
on the runway in the Austrian capital Vienna after the flight with Austrian airline Comtel Air from Amritsar stopped to refuel.
           
Passengers said they were told they had to hand over £20,000 ($31,500, 23,500 euros) to complete the journey to Birmingham in the English Midlands.
           
More than 180 passengers, who should have arrived in Birmingham on Saturday, finally reached the city late on Tuesday, according to the Birmingham Mail newspaper.
          
Elderly women and children were among the passengers.
           
One passenger, Dalvinder Batra, told the paper: "It is absolutely disgusting. There are still people stuck out there."
           
Ranbir Dehal said: "We were escorted to the cash point to take money out. They said there was a deficit of nearly 24,000 euros and they gave us receipts."
           
Reena Rindi, who was travelling with her two-year-old daughter, told Channel 4 News: "We wanted to go home. We'd been stranded for about three to four days. Who was going to take us home?"
           
She said passengers agreed to pay so they could fly to Birmingham and added: "We all got together, took our money out of purses -- £130.
           
"The children under two went free.
           
"If we didn't have the money they were making us go one by one outside in Vienna to get the cash out."
           
Konrad Bhupinder, managing director of Comtel Air, blamed the tour operator Skyjet, which reserved the flight tickets, for the problem.
           
"We only organise flights if the tickets have been paid for," he said, adding that in this case Skyjet had not paid the airline for the flights.
           
The flight had been due to take off on Saturday but was delayed to Tuesday because of a conflict between Skyjet and Comtel Air, which had hired the plane and the crew from a Spanish company, Mint Airways.

hindustan Times

After Kingfisher, it’s Jet. Can anything save the airline industry?

The hits just keep on coming for the Indian aviation industry. On Tuesday, Kingfisher Airlines was in the news because it planned to cancel up to 31 flights daily until 19 November because of a severe cash crunch and dwindling numbers of cabin crew and pilots.

Then on Wednesday, The Economic Times reported that Jet Airways, India’s largest carrier by passengers, was planning to cut up to 10 percent of its workforce, or about 1,000 employees, because of high fuel costs and intense competition on key routes from low-cost rivals. While that plan might run into resistance (the airline ran straight into trouble the last time it tried to retrench people), the point to be noted is that it’s far from alone in its operational woes.

And of course, there’s little need to iterate the perennial problems of state-run Air India.

Reuters

The dire state of the airline industry is evident by the fact that barring Indigo, pretty much all the main carriers – low cost and full service – Jet Airways, SpiceJet and Kingfisher are expected to post losses for the quarter ending September.

In a recent report, HSBC Securities estimated Jet Airways’ second-quarter loss at about Rs 350 crore. The airline will announce its results on 11 November. Even Spicejet, which posted a loss in the quarter ending June, after reporting profits for nearly two years, is expected to extend its losing streak.

In fact, all three carriers are expected to post losses of about Rs 750 crore, according to a recent Economic Times report.

Ironically, the airlines’ woes come against a backdrop of strong market expansion. Global aviation body IATA said recently that India’s aviation market expansion was the strongest in the world, tripling in the past five years. It also predicted the Indian civil aviation market to register a compound annual growth rate of more than 16 percent between 2010 and 2013.

It doesn’t require rocket science to understand why airlines aren’t greatly benefiting from the expansion.

One, airlines pay high fuel costs and airport charges. Jet fuel accounts up to nearly 40 percent of an airline’s operating costs. The price of jet fuel has climbed by nearly 45 percent from a year ago. Adding to the problem is the fact that states have slapped their own taxes on jet fuel. The average tax on jet fuel in India is 24 percent, second only to Bangladesh, which charges 27 percent. Throw in a sharp rupee depreciation (which increases the cost of crude oil imports) and it’s easy to see why the cost of operations is relatively high for airlines in India.

Two, airlines like Jet and Kingfisher have been using flawed business models for their full-service carriers. While Jet has now said it will focus on low-priced offerings, Kingfisher has scrapped its low-cost Kingfisher Red operations.

Three, in a bid to capture market share, airlines are pricing tickets aggressively. As a SpiceJet official recently noted, some carriers continued to price their tickets below cost and offering 15-50 percent discounts on tickets as they try to undercut the competition. Irrational pricing adds to the burden of turning a profit.

Four, some airlines like Air India, Jet and Kingfisher are heavily burdened with debt, which they mostly took on to purchase aircraft. Air India’s debt is a crippling Rs 42,570 crore, while Jet’s is about Rs 13,400 crore, according to a recent Firstpost article. Kingfisher’s debt totalled Rs 6,000 crore.

Five, maintenance costs for airlines are quite high. The country has very limited maintenance and aircraft repair operation centres and the few centres we have are expensive, again because of high taxes. Maintenance costs account for about 13 percent of total operating costs for an airline.

Given these challenges, it’s not surprising that foreign investors have been busy dumping stocks in the aviation sector in the past quarter. According to Business Standard, foreign investor stake in Jet Airways has dropped from 5.7 percent in the quarter ending June to 4.6 percent in the quarter ending September.

Foreign investment in Kingfisher Airline, already low at 3.02 percent dropped further to 2.1 percent during the same period, while in SpiceJet, foreign investment declined from 10.16 percent to 6.17 percent at the end of September.

The state they are in now, India’s airlines are unlikely to attract foreign investment even if the sector is thrown open. For now, the sector seems destined to fester in its own crisis.

Firstpost