Aero Blog

Archive for April, 2010

I will not be the first to say that airline tickets have lot more than they should be but there is a ton of ways to get cheap airline tickets to anywhere in the world. The key is where to look and for which airline to look into. We have a few tips for you on how to get some low fares and some very cheap airline tickets fully rightfully.
As per my knowledge, most of the airlines must sell tickets to their lights to offset the cost of the flights since no matter how many or how few people are on the flight it must run and they must spend the money. As the flight gets closer, the airline will lower the price of their airline tickets to get the plane to fill up. They know that they cannot get full price so they keep lowering it a bit every day until the take off. The closer to the flight that you are willing to book it the cheaper you will get the airline ticket. The last minute airline ticket websites communicate with the airline and know how low they will go. Since I do not trust, the sites I get the number form them and present my offer to the airline. It really does work.
It is not easy task to found a last minute cheap airline tickets provider or cheap travel agents. As we know most of the travel agents can offer cheap airline tickets in advance while you book your airline tickets three or six months before.
The best way that I have found last minute cheap airline tickets is to go to the search engines such as Goggle, Yahoo, MSN etc. and search with few word like last minute cheap airline tickets, last minute cheap flight tickets, last minute cheap airline, Cheapest last minute ticket etc. and make the list of major travel agents and their websites in your area. Check out the all travel agents website one by one while inserting your destination or travel information.
The last minute ticket buying is the best option for booking airline ticket I have found to get my cheap airfare. I promise that if your try it out you will be pleased. Besides, you have absolutely nothing to lose by trying it but you will miss some great airline deals if you do not try it. I suggest you few best travel agents website as I found while searching on Google. These are Airtkt.com
Cheapfareguru.com
Erostours.com
Happy Traveling

Despite a recent report in one of the nation’s top news papers detailing the surprising string of accident free years in commercial aviation, aviation lawyers have been kept busy by any number of legal and liability issues. It has been found in a recent study that commercial fights in the United States have gone two consecutive years without a related accidental death. This is the first time that in the history of United States aviation that this feat has occurred. However, the average aviation lawyer still must battle over certain safety and liability issues that have kept the need for such specialized lawyers in demand. These lawyers, while obviously not having to concern themselves with personal injury claims due to accidents in the previous years of relative safety, have still had their hands full with defining regulatory bodies and creating new and protective laws for consumers, bystanders, and workers.
While assigning liability in an accident and insuring that a claimant receives due process of law and proper compensation where deemed necessary is the primary task of an aviation lawyer, it is not the only task. These specialized lawyers must deal with a complicated set of government institutions at the state and local level, and may even have to deal with international regulatory bodies for large, commercial flights. These agencies, committees, and other regulatory bodies are largely created from case files brought through and prosecuted by lawyers. Just like criminal law, aviation law has been created by these vast networks of case files and court decisions. These regulatory bodies have sprung from these decisions. Creating these laws, therefore, dominates much of these attorneys’ time and energy even when there are few commercial accidents to prosecute.
Aviation attorneys are also employed to institute safety standards. Many of these attorneys are involved in, or used to be involved in, commercial or private aviation. Many are current or former pilots and enjoy private joy flights. They are, given their concurrent knowledge of law, uniquely qualified to institute and maintain safety standards. By providing this service, they are insuring that when you buy your ticket for your next flight, you can be guaranteed of certain standards. These include safe airplane design, fully functioning safety systems (such as lighted pathways, available exits, flotation devices, etc.), regular maintenance schedules, and age limits on old aircrafts. Without these basic guarantees commercial flying could be a dangerous practice. Once these safety guidelines are established, attorneys can then use these standards to prosecute those at fault during an accident and more easily assign liability to those at fault.
Even while the United States has had two consecutive years without a death associated with the commercial airline industry, the average aviation lawyer is still busy and in demand. Despite the fact that there have been no accidents to prosecute, these specialized lawyers still must maintain strict industry safety standards, thus insuring that the unprecedented string of safe and successful flights continue, and develop and fine tune the developing field of aviation litigation and law. Therefore, these particular lawyers are still heavily in demand.

Flying is the fastest means of travel between two places. To avail this luxury to all, there are often deals that are available, that offer Airline dirt cheap tickets to travelers. There are also different levels of comfort available, and of course this is dependant on your budget. If money is not an issue, then you can go ahead and book yourself a first class ticket on a whim, but if money is tight, you will put as much planning as necessary into your trip.People with low budgets can get their Airline Cheap Dirt tickets from low cost carriers or budget airlines. These are no frills airlines that can be described as airborne buses. Now, even with their tickets being already cheap, putting in other factors can make then even more dirt cheap. For example, picking a red eye flight or even picking a flight with an overnight layover.The process of gathering information on what airline to fly is also important. This is because we learn more options, and we learn how to factor in different things that make the flights cheaper for us. The money that is saved after booking a ticket with budget airlines can allow you to have extra money for your vacation or trip. This means you can splurge and spend a little more than planned on your hotel or use the money to do some shopping. When you find these Airline Cheap Dirt tickets, always make sure that before you pay, you have confirmed all the details ensuring that they have put in or given the correct information regarding your trip.Always make sure that you know what options are offered for changing flights, if it’s even an option, and what policies they have regarding refunds.

There have been different types of sunglass styles getting popular each and every year, but the only category of sunglasses that are popular right from the start of sunglasses production until now, for more then 70 years is the Aviator type. What actually makes this kind of sunglasses get ticked? If you see how it has become popular, or for that matter how most of the sunglasses style get popular, it is definitely through the trend of fashion set by the Hollywood actors or the heroes. The Aviator sunglasses became popular with the TOP GUN Tom Cruise.

But since then it has been in the market popular as ever, and is to remain so for more time to come. The aviator sunglasses were initially made for the use of air force personnel of the US, to protect them from UV rays. Ray-Ban Sunglasses made them this and it came up with public sale of Aviator sunglasses the next year and every one lapped it up.

The Aviator sunglasses has now become a classic style and still popular and fashionable in its own way. The main reason for their persistence is its uniqueness in design that is not met with any other style in the sunglasses range. The aviator sunglasses are the best from the original manufacturers Ray-Ban but there are also designs of aviators floating the market, made from other brands based on the original aviator type.

If you want o be classic in fashion and still be amazing in looks, it’s the aviator sunglasses you are looking for. Reasonably priced and comfortable to be worn, coming with additional advantages of protection, polarized vision, or mirrored style of look, they just make you just great to be looked at!

If you ever fly on a private jet, you will understand that charter flights are the best way to fly. Charter airlines provide the greatest customer service and the best benefits to their passengers. After I took my first charter flight, I realized very quickly that charter flights represent the future of the airline industry. There are a few reasons why charter airlines are so wonderful. First, they provide passengers with amazing customer service. Second, companies that seek to charter flights will be able to save time and money by renting private jets. Third, several charter airlines have lowered their prices significantly, and they are competing with commercial airlines for business. Many large and small companies used to buy large packets of first class and business class tickets on commercial airlines, whereas now they are renting private jets and charter flights because it is more economical and a lot more pleasurable.
The Customer Is Royalty
Charter airlines treat their customers like royalty. Charter airlines hire only the best-trained, most effective staff to run their private jets. Jobs in the charter flight business are very competitive, so managers of charter flights find only the best of the best to work for them. These people dedicate all of their time to ensuring that you have a great time when you fly. In addition, when you fly on a charter flight, you plan the travel itinerary, you choose your breakfast, lunch, and dinner, and you can decide when the lights go off. You are the master of your domain. I remember how nice and accommodating the airplane staff was on my first charter flight. Many charter airlines want to cultivate long term relationships with their clients, so they ensure that they treat their clients with the utmost respect. It is beneficial for both companies when a charter airline and a small or large business decide to join a long term business relationship, because both companies benefit from this partnership. The charter airline receives a frequent customer, and the business gets to fly on private jets for a huge discount.
The Economic Advantage
Charter airlines enjoy a large economic advantage over commercial airlines. Commercial airlines are charging more and more, whereas charter airlines are charging less and less. Charter flights cost nearly half as much as they did in the 1980s, adjusted for inflation. Many individuals and businesses are seeing that renting a private jet is way more economical than buying a ticket or a pack of tickets on a commercial airline. Also, your dollar goes way farther when you charter flights. Many companies, such as AirCompair, are offering a new deal in which they offer memberships to their customers in exchange for big discounts. You save a whole lot of money flying this way, so these companies are enjoying great success by employing this strategy.
Conclusion
Charter airlines are the future of the airline industry. Trends show that more and more savvy business owners are buying tickets with charter airlines so that they may save money and enjoy the pleasurable experience of flying on a private jet. It is fun, relaxing, and peaceful to fly on a private jet, so people are starting to realize that this is the best way to fly. Check out companies that are offering a competitive price like AirCompair.

In December, 2005, this airline was renamed as “Indian”, which is a part of the preparation for its merger with Air India. On February, 2007, at the authorization of government, Indian Airlines was merged with Air India to provide improved facilities to its flyers. After mergence, the airlines retained the initials of Indian Airlines as IC with logo name as Air India. This mix and match was done to augment the amenities within the lowest possible costs. This airline has always been a preferred among people in the country. With facilities like promotional or discounted fares, travel assistance, excellent choice of meals and holiday packages, Indian Airlines continued to be among the top favorite of people.  Airlines are a means to enjoy luxurious and comfortable travel to a variety of places. The same anticipation of flyers is fulfilled at Indian Airlines, where you are served with utmost care and comfort. This airline is a state owned department that works under Ministry of Civil Aviation. If you are willing to travel through this airline; then, you should be rest guaranteed of services that will provide you with best-in-class services. Indian Airlines is a Delhi based airways that focuses primarily on domestic destination, with few global destinations too. The main hub of this airline is Delhi’s Indira Gandhi International Airport and important bases at Chhatrapati Shivaji Airport at Mumbai, Meenambakkam Airport at Chennai and Subhash Chandra Airport at Kolkata. With the facility of inexpensive fares provided from time to time, you will have the autonomy of availing cheap Indian Airlines tickets. After all, everyone likes to travel at affordable rates and save a lot of money. This airline is such that its conveniences are of supreme class, which are available within your budget. Even, the cabin crew and ground staff are well trained to deal with the passengers with utmost care and comfort. The seating capacity of the aircrafts also provides proper leg space for a relaxing journey. The meals provided while the journey is something to be relished. You will be given a choice to select from vegetarian and non-vegetarian dishes, along with special meals for health conscious people. By now, you must have been lured to take-on a flight with Indian Airlines. If you plan to travel to some international destination like Dubai, Bahrain, Colombo or Singapore; then, you definitely will have ever appreciating memories from your air travel. The reasons for this are choicest of delicacies, excellent in-flight assistance, warm hospitality and comfortable journey. After the merging of Indian Airlines and Air India, the result seemed to be a constructive decision. Even, the fares allow almost every category of people to travel to their dream destinations. Now, they don’t have to recline with not having enough finances for an air travel.

In the United Kingdom, one of the most important regulatory bodies in the aerospace industry is the Civilian Aviation Authority, or the CAA. The CAA was created in 1972 to act as a public organization to oversee all elements of British domestic aviation. The CAA was formally made the government’s aviation regulator with the Civil Aviation Act in 1982, which replaced the Department of Transport in this role. Aerospace professionals, from engineers to pilots, need to know about the CAA’s regulatory functions and jurisdiction in order to better understand the British aerospace industry.

Aerospace professionals should first understand the jurisdiction in which the CAA provides regulation and consultation. The Civilian Aviation Authority is the sole regulator for flights within the United Kingdom, from small charters to regularly scheduled airliners. However, the international nature of airline travel has required consultation and team work with European aviation organizations in order to facilitate safe and efficient travels. When international regulations come into effect, the CAA’s offices in London act as the local office for the European Aviation Safety Agency. CAA officials also act on regulatory boards of the EASA which determine regulations and enforcement policies.

The CAA has broad authority as the United Kingdom’s regulatory of aviation and aerospace activities, which should be understood by aerospace professionals. The function of the CAA that professionals will become most familiar with is the licensing of aviation and aerospace professionals. Flight crew, engineering, and air traffic controller licensing all run through the CAA and regular license upgrades and renewals are required. In a similar vein, the CAA monitors medical regulations and facilitates physicals for aviation personnel that are involved in regular flights.

Aerospace professionals may become intimately familiar with the professional licensing aspects of the CAA but there are a number of other functions that are equally important. The CAA regulates the United Kingdom register of aircraft, which is necessary to maintain an accurate record of all planes in the region. As well, the CAA regulates the licensing of airplanes and other aircraft in the United Kingdom. The CAA not only regulates individual aircrafts and professionals but leads the charge against unfair aerospace business practices. The CAA’s regulatory function allows it to manage public aviation organizations while regulating against private monopolies. In all, the CAA’s jurisdictional and regulatory functions allow it to deal with safety and economic issues in the UK’s aerospace industry. Aerospace professionals who understand the nuances of the CAA will function better in their jobs.

An airlines credit card provides significant benefits to anyone that travels regularly, or that would like to earn airline miles. Many of the lenders offering this type of credit card are unique from each other. Therefore, when deciding on and choosing the best fit, be sure to read all terms and agreements before signing up for these lines of credit. One of the most obvious differences between airlines credit cards and standard reward based credit cards is that they offer airline miles, usually through frequent flyer miles.
Compare Them Carefully
When you consider opening a new airlines credit card, take time to compare and contrast at least several card offers to find the best fit. You will need to consider any personal requirements that you have or any loyalties you might have to one airline or the next. Additionally, consider all of the terms of related offers to ensure you receive the best opportunity. Here are a few things to consider when looking for the best choice in an airlines credit card.
Does The Airline Matter?
Those that prefer to fly on one particular airline will need to select a credit card offer from a partner of that airline. Most of the larger airlines pair up with a credit card provider to offer a rewards based program through them. These are often referred to as “co-branded” cards. If you consistently utilize the same airline, logic would dictate that using a co-branded credit card to earn frequent flyer miles on that specific airline would be the best way to go. Airlines credit card offers like this are readily available to those that qualify. But choose carefully…
Analyzing The Terms
When choosing airlines credit cards, look thoroughly through the terms and conditions of each card. Not all rewards cards are the same. Some offer better interest rates than others. Some may allow you to earn frequent flyer miles at a faster pace. One very important thing to look for when considering these cards is the expiration of miles. Some of these rewards programs for airlines cards have miles that will expire if they are not redeemed within a specific timeframe, so you’ll end up losing them if you don’t use them quickly enough. Some airlines have very strict policies regarding their frequent flyer miles accounting. For example, you may earn twice as much on airline ticket purchases with your line of credit than you would earn on standard purchases.
What Are The Perks
Many believe that frequent flyer miles offered by airline credit card offers are strictly for providing free airline miles, or free airline tickets. While this is the best choice, if you have not earned enough points, you may qualify for other discounts or upgrades. Upgrading to first class may be an option, or discounts at hotels and car rentals may be part of the offer.
Simply put, take the time to analyze and compare at least several offers before selecting one. Determine which will provide you with the best return on your investment based on how you will use it. If you plan to use it strictly for travel, then ensure it provides additional rewards for hotels and other travel related expenses, for example. But at a minimum, take the time to do an in-depth comparison of each offer to determine if it fits the bill best for you.

Aviation industry :  Back into the ‘friendly skies’ by Farnborough 2010 ?

                                           SUNIL KEWALRAMANI                  February 18, 2009

As investments, airlines are best left to relentless optimists and colourful egomaniacs. Over the long term, a diversified portfolio of airline stocks has reliably lagged behind broader market averages. Airlines’ long-run operating margins have averaged just 2 per cent since 1950, says UBS.

In 2007, during the Paris Air Show, the aviation industry was flying high….the world economy was booming and credit was plenty.  Customers who had booked from Boeing and Airbus could get a premium for waiving their bookings in favour of companies interested to jump on the aviation industry growth story.  Today, airlines are happier returning their aircraft than taking delivery.  In 2008, the Amex Airline Index has plunged more than 70 %.   Not only has the game changed, the dominant players have changed as well. At Farnborough this year,  Middle-East’s Etihad Airways has ordered 45 aircraft from Boeing and 55 from Airbus, worth about $ 20 Billion at list prices.  It reinforces Middle East’s position as one of the few regions where airlines have the financial clout to expand aggressively.

Singapore Airlines, which reported its third-quarter results on 10th February 2009,, is one of the less terrible operators. It has the two qualities every carrier needs to withstand troughs: a strong brand and a patient majority shareholder (state-owned Temasek, in SIA’s case). On top of that, it has one of the world’s better-looking balance sheets: cash in the bank exceeds long-term liabilities by more than three to one; a youngish fleet of fuel-efficient aircraft; and one of the most highly rated management teams around. As such, the world’s largest airline by market capitalisation is an industry benchmark. If SIA is struggling, pity the rest.

SIA is indeed suffering. The September to December period, traditionally its most profitable, saw net income almost halve. Operating metrics were solid: passenger load factors down only 3 per cent, while costs (excluding fuel) fell 5.5 per cent. But it came a cropper on hedging, locking in purchases of jet fuel at much higher rates than the period’s average of $99 a barrel. Losses should widen: 44 per cent of fourth-quarter fuel requirements – well above the industry average – have been pre-bought at $131 a barrel, compared with today’s spot price of $56.

As those hedges fall away, however, SIA has a real opportunity to stand out from the pack by protecting its dividend. China Eastern had recently rejected Singapore Airlines’ bid to expand its operations. What is more, cash flow after capex over the first nine months almost covers last year’s dividend. In an industry that oscillates between varying degrees of over-capacity, preserving the payout would really hammer home the difference between the leaders and the laggards.

 

For Vijay Mallya—the self-proclaimed “king of good times” who patterns himself after Richard Branson, the launch of Kingfisher Airlines three years back seems to have come as a cropper. Slower economic growth due to unexpected world crisis along with dramatic fuel price rise earlier this year has taken the tails out of the airline industry. There are urgent demands being made for reducing sales taxes from 26 per cent to 4 per cent which could help reduce air fares.  A sanguine Mallya has called for India to ease its restrictive FDI policies, which currently prohibit foreign airlines from holding stakes in domestic Indian carriers.

 

Although oil prices have retreated of late, threats by OPEC to cut production coupled by the threat of inflation which could return in the wake of extremely expansionary monetary policies of the world central banks, could cause fuel prices to go up again.  Fuel costs make up about 65 % of costs on long-haul flights but only about 30 per cent of costs for short-haul flights. Qantas, one of the world’s most profitable airlines has recently grounded aircraft, suspended routes, chopped capacity, cut jobs and struck a deal with its long-haul pilots to lock in the company’s 3 per cent per annum wages policy until 2013.  In the wake of 9/11 and SARS, the Australian carrier had performed better than its peers, picking up market share as well as aircraft abandoned by airlines who could not afford them.

 

According to a report by Frost & Sullivan, the price of Indian fuel is based on international parity pricing, despite the fact that international crude is refined in India.  Aviation turbine fuel (ATF) rates in India, represent 40-45 % of ticket costs as compared to the global standard of 35 %.  In the backdrop of high fuel prices, domestic passenger numbers has fallen significantly from a year ago according to the Indian aviation industry.  Jet Airways  recently laid off 10 % of its workforce, only to relent and take them back under duress.  GoAir has laid off a significant chunk of its expatriate pilots. SpiceJet has announced reductions in its daily flights from 117 to 100.  Kingfisher Airlines is negotiating sale of two of the five A340-500 aircraft it had committed to buy from Airbus in 2007.  Both Spicejet and GoAir are returning planes to lessors.  It is also contemplating deferring taking deliveries of 29 narrow-bodied A320s .  In response, some have adopted the use of winglets on the wing tips to reduce fuel consumption, others are flying their aircraft at higher altitude, choosing parking bays closer to the runway to reduce taxing time.  Some are cutting down the amount of water in toilets and for human consumption they carry while others are carrying lighter plastic cutlery, food trays etc. Even the Indian government has recently pitched in by withdrawing the customs duty of 5 % on jet fuel.  In addition, oil companies are reducing ATF prices by Rs 9429.87 per kilo litre with immediate effect.

 

American, Continental and Delta have reduced flights to various destinations. Pratt and Whitney estimates that its EcoPower engine-washing process saves Hawaiian $ 1 million in fuel annually across 31 Boeing 767 engines.  Eight senior pilots and the US Airline Pilots Association have filed complaints with the Federal Aviation Administration stating that US Airways is pressuring pilots to use less fuel than they feel is safe, in order to save money. By removing six seats, JetBlue reduced an A 320 weight by approx 904 lbs.  Air Canada is considering removing paint and primer from its 767s to save 360 lbs per plane.   Alaska Airlines indicated in 2004 that removing just 5 magazines per aircraft could save $ 10,000 annually in fuel.  It’s new beverage cart, at 20 lbs lighter, could save $ 500,000 in annual fuel costs.  Yet, fashion favouring turbo-prop aircraft, the most fuel-efficient and environmentally friendly in the skies, should help sustain order books for the same. ONEWORLD alliance of various airlines will jointly explore options for collective buying of fuel. 

 

Mergers and Acquisitions enable capturing abandoned  territories :

In 2003, Air France bought rival KLM Royal Dutch Airlines and has succeeded in luring passengers away from European rivals by offering long-distance connections through its Paris and Amsterdam hubs.  Lufthansa acquired Swiss International Air Lines Ltd in 2005. It aims to match last year’s record profit by capitalizing on rivals’ weakness and by harvesting routes abandoned by competitors.  This is analogous to Southwest’s model, where Southwest is capitalizing on players who have pulled off during the downturn in the aviation industry precipitated by high oil prices. Delta Air Lines and Northwest Airlines are planning to merge.  Continental and United Airlines are also planning a close alliance.

 

Elite class of rising carriers emerges on the scene :

According to an article in The Wall Street Journal, the strength of this club (which includes Southwest, Emirates, Singapore Airlines, Ryanair and Deutsche Lufthansa) underscores the growing gulf between the haves and the have-nots. These powerful players are able to hedge costs, borrow money, buy new planes and pamper high-paying customers while their poorer rivals cut routes and seek cash infusions. On Singapore Airline’s five new Airbus A 380 super-jumbo jetliners, first-class passengers sleep on sheets made by French fashion house Givenchy, while coach passengers have USB ports for connecting their own electronic devices next to their seat-back video screens.  In the face of a severe industry downturn, Singapore Airlines’ operating profit rose 60 % in the fiscal year ended March 31, 2008.

 

Southwest Airlines  as a role model :  It’s discount-model has kept it profitable for 35 years.  It aggressively hedges fuel costs and thus has avoided current high fuel prices, to which most of the other carriers have succumbed.  It has hedged fuel at $ 51 a barrel.  The efficient hedges have enabled Southwest produce gains of $ 455 million in 2004, $ 892 million in 2005, $ 675 million in 2006 and $ 439 million for the first nine months of 2007.  It  has $ 3.7 Billion of cash in the bank and a market capitalization of $ 9.9 Billion, more than the combined market value of the six-largest conventional U.S. carriers. 

 

Next-Generation aircrafts :  Airbus has demonstrated its ability to fly its A380 aircraft with a synthetic liquid fuel processed from a gas called gas-to-liquid (GTL) in a three-hour flight between Filton, UK and Toulouse, France.  The new A380 has fuel efficiency of 2.9 litres a passenger for every 100 kms and carbon emissions of just 75g per passenger per km—17% less than that emitted by the Boeing 747.  Boeing 777 is the most fuel-efficient plane in its class.  The 747-8 will be 16 % more efficient than the 747-400 (and 11 % more efficient than the A380).  The A350 is the Airbus’s response to the Boeing 787 Dreamliner. Besides, EADS’s A400 M, once in service,will be capable of carrying a payload of up to 37 tonnes over ranges of up to 4700 nautical miles. Launched on July 8 2007—7/8/7 in US date format (date was chosen for impact), demand for the high-tech and futuristic 787 Dreamliner—a long-range 250 to 300-seat jet whose carbon-fibre body is set to make it 20 % more fuel-efficient than comparable models has been astounding. Dreamliner’s advanced aerodynamics (smooth wiring technology, spoilers that droop when flaps are deployed, and laminar flow nacelles lower drag) increase efficiency and reduce fuel consumption.  Higher bypass ratio allows engines to be quieter. Boeing has received orders from more than 60 customers for 892 aircraft, worth $ 145 Billion at list prices. Boeing’s energy use and carbon dioxide emissions at its major facilities are believed to have fallen 24 % between 2002 and 2007.  The Chinese white 90-seat ARJ21-700 jet is called “Xiang Feng” or “Flying Phoenix” and its appearance broadcast live on state television. 100 of the 180 bookings have come from Kunpeng Ailrines, a new venture between China’s Shenzhen Airlines and the US-based Mesa Air Group.  The arrival of the “Flying Phoenix” will truly mark the ascent of China as a leading world superpower and will energize growth in the Asian subcontinent.

 

Green Ross to SpiceJet’s rescue : indicative of sound contrarian call

Spicejet of India has chose as its suitor W L Ross & Co.  W L Ross has made his reputation on contrarian calls — buying into the steel industry in the US when no one would touch it, for example, and snapping up a Japanese bank when it was saddled with bank loans in 2000.

 

Low cost model here to stay

Air Deccan pioneered new ticketing channels at internet kiosks, petrol pumps and India post offices which helped bring down distribution costs by 12%-15% as compared to opting for a GDS (Global Distribution System) and for travel agents through the legacy system. If the motive is to cater to the large inclusive consumer base at the bottom of the consumer pyramid then the business model must create a scaleable product that delivers higher volumes at lower price points above very low costs with wafer thin margins.  The low cost model is about innovations, efficiency and enhanced asset utilization which are increasingly necessary in times of high fuel prices. The cost per available seat km of a low-cost carrier is significantly lower than that of full-service carrier.  The average revenue per seat for Ryanair, Europe’s biggest budget carrier, is Euro 39, as against Euro 247 for British Airways and Euro 57 for EasyJet, another low-cost carrier. It therefore implies that the airline with the lowest revenue per seat is at a comparative advantage and has significant cushion to tide over this rather cyclical industry.

 

The Indian aviation is still one of the country’s sunrise industries and both airlines and investors consider India as a compelling market. In my opinion, the oil bubble would have burst due to more durable demand destruction by the time the next Farnborough show is held in 2010.  The fundamentals viz. that India’s 1 billion people generate just 16 million domestic trips a year, is still very much intact.  This, coupled with the emergence of investors with deep pockets will ensure that the industry emerges stronger after the chastening shock. Equilibrium is expected to be found in the next two years as airlines are working to optimize capacity, rationalize routes and cut loss-making routes.

 

By simply raising fares, the distinction between low-cost and full-fare airlines will diminish, resulting in an undifferentiated business model. The government, on its own part, has to up its ante and improve its infrastructure. It is not uncommon to witness planes circling over destination zones in Mumbai and Delhi several times before being allowed to land, thus causing wastage of precious fuel.

 

The current scenario is almost reminiscent of the last downturn in the aftermath of 2001 terrorist attacks on the US.  That setback proved short-lived and so I believe will this one be.

Oil prices have retreated under the impact of unwinding of speculative positions by hedge funds and demand destruction is taking centre stage. The future belongs to the bold and daring, and not the timid and weak. The stage is set for survival of the fittest.  In the process, men will be separated from the boys.  The ongoing turbulence presents a tremendous opportunity for aviation industry players to emerge stronger than ever before.  The 2010 Farnborough air show promises to be dominated by a new set of industry players, ones that emerge victorious after trial by fire.

 

Note : Mr Sunil Kewalramani is a WHARTON BUSINESS SCHOOL MBA and CEO, Global Capital Advisors.  He may be reached at worldequity@sunilkewalramani.com. 

Bullet Points :

1)      The arrival of the Chinese “Flying Phoenix” will truly mark the ascent of China as a    leading world superpower and will energize growth in the Asian subcontinent.

2)          For Vijay Mallya—the self-proclaimed “king of good times”,  the launch of Kingfisher Airlines three years back seems to have come as a cropper.

 

3)          Launched on July 8 2007—7/8/7 in US date format (date was chosen for impact), demand for the high-tech and futuristic 787 Dreamliner—a long-range 250 to 300-seat jet whose carbon-fibre body is set to make it 20 % more fuel-efficient than comparable models has been astounding.

4)          The fundamentals viz. that India’s 1 billion people generate just 16 million domestic air trips a year, is still very much intact. 

5)          Rather than lean on the government for largesse, the aviation industry players need to pull up their socks, adopt global best practices, learn the art of effective hedging of fuel requirements, stimulate consumer demand and capitalize on battle-routes abandoned by their weaker rivals to strengthen their position in the world aviation industry. 

Airline miles and frequent flyer credit cards can be a great way to save money on vacations and airline tickets. As with most products, knowing the differences between the products that are available is the key to making sure you get your best deal. The first thing to know is that there are two classifications of “Airline” credit cards. Most people are unaware of the differences between the two types of cards so I thought I would make things a little clearer.

The first thing you need to know about airline credit cards is that they are horrible credit cards unless you intend to use them specifically for the purpose of airline travel. Most of them have annual fees and higher interest rates than credit cards that are available. If you are the type of person that will even occasionally carry a balance on their card this class of card is not for you. The interest rate that you pay coupled with the annual fee will probably negate your gains in airline miles. This being said, let’s look at the first type of airline cards. Frequent Flyer Credit Cards – These cards are sponsored by a specific airline. The credit cards are co-branded with a major bank like American Express or Bank of America. These are the original frequent flyer cards that hit the market. These cards are perfect for those people who are “brand loyal” or otherwise compelled to use one airline by work or airport location. These cards will allow you to establish frequent flyer accounts that actually have cash values.

The downside is that these cards do not allow you to shop fares because the miles will not accumulate on other airlines. These cards usually have the higher annual fee when compared to airline miles credit cards and has the higher of the interest rates between the two classes. I presume the higher rate is because of the extra expense to the issuer for the co-branding.  Of coarse I could be wrong; I am due for my first mistake this year. The next type of airline credit card is airline miles credit cards.Airline Miles Credit Cards – This class of card is usually sponsored by credit card companies or banks don’t have an affiliation with a specific airline. This class of airline card has its pros and cons as well. The best feature among airline miles credit cards is the ability to use them on multiple airlines. These cards usually reward the user with “points’ as opposed to miles like frequent flyer credit cards do. These points can then be converted to airline miles or other travel related perks. Unlike frequent flyer cards the card holder has the choice to apply these points to hotels, restaurants, retail stores as well as airline miles.

Savvy shoppers with good credit can also find better rates and no annual fees on some airline miles credit cards. One of the best cards in this class is hands down the Capital One® No Hassle Miles(SM) Rewards card. It doesn’t have an annual fee and its interest rate is tolerable should you have to carry a balance. The down-side of the airline air miles credit cards are the “gotchas.”.

These are the little things in the fine print that can zap your air miles or cost you money. Read the guidelines carefully. For instance some cards will totally erase your air miles earned in a reporting period is you are more than 3 days late on your payment. Even though this is within the credit card issuer’s grace period there is a separate rule for the air miles benefit. So, make sure you read the fine print to make sure the card meets your lifestyle and spending habits.

The best way to get the most of the perks on both classes of cards these cards is to charge and pay back around $1000 each month. One example is that my wife and I just found out that our mortgage company allows people to pay with American Express. Just using our air miles card to pay our mortgage each month we will earn one free ticket per year! Just remember what I said at the beginning. Unless you are using air mile credit cards for the specific purpose to earn air miles they are probably not a good idea.