GSTnew tryst with - ACAAI News · GSTnew tryst with. Organised by ... look at India’s transport...

Voice of Indian Air Cargo Industry

Vol 8 - Issue 3 | JULY - september 2017

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Cover StoryLogistics’ NEW tryst With gstIndia woke up to a well publicised roll out of Goods and Services Tax (GST) on July 1. GST proposes to make ‘one India and one tax’. We look at India’s transport and logistics sector’s tryst with this ‘good and simple tax’.

eXCLUSIveAAicLAs WiLL sEt A bENchmArk oN EAsE of doiNg busiNEss iNdEx At AAi Airports

FoCUSEthiopiA opENs AfricA’s modErN cArgo tErmiNAL

THE OFFICIAL MAGAZINE OFAIR CARGO AGENTS ASSOCIATION OF INDIA

(ACAAI)

ACAAI OFFICE BEARERS

PRESIDENTHemant Bhatia

VICE PRESIDENTT A Varghese

SECRETaRy gENERalSunil Arora

TREaSURERM Afzal Malbarwala

EDITORReji John

[email protected]

aSSISTaNT EDITORSSurya Kannoth

[email protected]

Rashmi Pradhan [email protected]

CORRESPONDENTSTwinkle Sahita

[email protected]

Shreya Bhattacharya [email protected]

SENIOR gRaPHIC DESIgNERPrasad Mohite

gRaPHIC DESIgNERRajesh Mhapralkar

DISCLAIMERViews expressed in the magazine

are not of aCaaI

Editorial & Admin. office710, Vindhya Commercial Complex,

Sector 11, CBD Belapur, Navi Mumbai - 400 614 INDIa

Email: editorial@ acaainews.com [email protected]

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ContentsVOL 8 - ISSUE 3 • JULY - SEPTEMBER 2017

IntervIewbrussELs AirLiNEs bEts big oN iNdiABrussels Airlines launched its service from Belgian capital to Mumbai recently. Bernard Gustin, Chief Executive Officer, Brussels Airlines, is highly optimistic about success in India

AAI Cargo Logistics and Allied Services Company Limited has appointed Keku Bomi Gazder as its new CEO. Gazder believes that AAICLAS will be benchmarked against the best in the world.

With the inauguration of the largest cargo terminal at the Addis Ababa Bole International Airport in Ethiopia, Africa is positioning itself in the global competitive market

22

16

uNLockiNg thE hiddEN potENtiAL to drivE AfricA’s Air cArgo groWthThe 'Second ICAO Meeting on Air Cargo Development in Africa' reiterated the fact that the continent has tremendous potential waiting to be unlocked.

rePort

newS

24 AcAAi coNvENtioN to bE hELd iN bALi from NovEmbEr 9-12

26 Air iNdiA LAuNchEs dELhi-WAshiNgtoN fLight

28 ALLiANcE Air ANNouNcEs LAuNch of fLights coNNEctiNg LuckNoW With bhopAL, JAipur, dEhrAduN

From the President's desk

Hemant Bhatia President

Air Cargo Agents Association of India

(ACAAI)

GST to transform the business

3

Goods and Services Tax (GST), as planned,

was rolled out on July 1, 2017. The Union

Government has officially introduced this

historic legislation at midnight of June 30,

2017 in the Central Hall of Parliament. The

implementation of perhaps the most significant tax

reform in the history of independent India is likely to

truly transform the business and industry environment of

our country. As is the case of any major reform, there are

bound to be difficulties and teething problems in the initial

stages until all the players become familiar and comfortable

with the new regulations and procedures. It is therefore

heartening that the Government has considered this aspect

favourably, and trade and industry have been provided

a window of over two months for familiarisation without

penalties for filing their GST returns.

An issue of great concern to the air freight sector is the

applicability of 18 percent GST on export freight. This

category was zero rated in the service tax regime. The new

levy on export freight under GST will have a cascading effect

on freight forwarders and exporters, and will increase the

cost of exports from India. ACAAI has vigorously taken up

this issue with the concerned Ministries and Government

Authorities. It is hoped that the Authorities will consider

the concerns which have been raised by ACAAI and fellow

trade Associations favourably. Our Association has also been

endeavouring to inform and update our members about this

new legislation through roadshows, meetings, etc. ACAAI is

also working closely with the airline community to ensure a

smooth roll-out of GST for the trade.

The impending implementation of GST, which will

subsume the numerous indirect taxes and levies pan

India into a single tax bundle, is a welcome development

as in due course, it is expected to greatly facilitate trade

and industry on the taxation front. However, there are

operational and system performance issues which continue

to plague the customs system ICEGATE. The frequent

disruptions and downtime of this system has reached

alarming levels and cause extensive delays in the clearance

of import and export cargo. Consequently, import goods

do not reach the ultimate recipient in a timely manner,

while export goods often miss their flight connections and

deadlines of the importers in the destination countries.

This scenario severely impacts the export competitiveness

of our country. The trade is vigorously pursuing this issue

with the highest Government Authorities in the country

for solutions. It is hoped that our efforts will bear positive

results in near future.

A new initiative which has been developing during the last

few months is the formation of a confederation of various

trade Associations under the provisional nomenclature

Federation/Confederation of Indian Logistics Associations

(FILA/CILA). The primary common objectives of this

Confederation are branding of logistics industry as an

industry of choice, skill development for logistics sector

and Industry status for the logistics sector. The modalities

of formally setting up this confederation are being finalised.

A full-fledged training establishment is also being set up at

JNPT, Nhava Sheva, Navi Mumbai.

It is now time to commence the planning for ACAAI’s

much-awaited annual Convention for 2017. The dates,

venue and other details are being finalised and will be

announced shortly.

JULY - SEPT 2017| www.acaainews.com

JULY - SEPT 2017 | www.acaainews.com4

Cover story | GST

new tryst withGSTLogistics'

JULY - SEPT 2017| www.acaainews.com 5

India woke up to a well publicised roll out of Goods and Services Tax (GST) on July 1. GST proposes to make ‘one India and one tax’. We look at India’s transport and logistics sector’s tryst with this ‘good and simple tax’.

President Pranab Mukherjee and Prime Minister Narendra Modi formally launching gST at Central Hall of Indian Parliament

RejI joHn

"At the stroke of the midnight hour, when the

world sleeps, India will awake to life and

freedom. A moment comes, which comes but

rarely in history, when we step out from the

old to new…” That is an extract from the “tryst with destiny”

speech delivered by Jawaharlal Nehru, the first Prime Minister

of independent India, to the Indian Constituent Assembly in

The Parliament, on the eve of India's independence, towards


Cover story | GST

"GST would not only reduce the cascading tax burden it would also accelerate seamless cargo movement supported by a robust warehousing and distribution mechanism."

Samir J Shah FFFAI

midnight on 15 August

1947. 70 years later towards

midnight on 30 June 2017

India once again made a tryst

with destiny stepping out

from the old to new. This time

it was the official launch of

the Goods and Services Tax

(GST), the most sweeping tax

reform for nearly 70 years.

President of India Pranab

Mukherjee launched the

new indirect tax regime at

the stroke of midnight in

the presence of Indian Prime

Minister Narendra Modi,

his cabinet colleagues and

major industry leaders in a

special function held at Indian

Parliament’s Central Hall.

Prime Minister Modi termed

GST, effective from July 1, as

a ‘Good and Simple Tax’ and

said its introduction was not

just a tax or economic reform,

but a social reform that would

nudge people on the path to

honesty and benefit the poor

the most.

After 14 years of struggle

to enlist the support of India’s

states, the GST replaces more

than a dozen union and state

levies and unify a country of

1.3 billion people into one of

the world’s biggest common

markets.

Calling the GST a simpler,

modern and more transparent

taxation system that will do

away with 500 different taxes

levied across the country’s

29 States and seven Union

Territories Prime Minister

said that it would end the

spectre of tax terrorism and

Inspector Raj that India’s

businesses have had to

endure for long. This, he said,

would be an outcome of the

technological backing for GST

implementation, which would

do away with grey areas and

the resultant discretion the

bureaucracy enjoyed over tax

payers.

India’s minister for Road

Transport and Highways and

Shipping Nitin Gadkari claimed

that it is the logistics sector

that will gain the most from

GST as cost will come down

by 20 percent. “Companies

could do this with a hub-based

warehouse system instead of

having warehouses in all major

consumer states. The check

posts at state borders have

already been brought down.

Karnataka, Andhra Pradesh

and Tamil Nadu, along with 20

more states, have dismantled

border check posts, reducing

hassles for trucks,” Gadkari said

in a recent interview to The

Economic Times.

The minister also said that

people should give the tax

reform at least a couple of

months to have a smooth

implementation. According to


"Some positive ways in which the impact being felt includes reduced cost of production, supply of goods with ease where we hope to see decreased state-border checks."

ravichandran PuruShothamanDanfoss India

him, the border check posts

have been removed even as

states await electronic way

bills, which will make truck

movement easier. The e-way

bill on Goods and Services

Tax Network (GSTN) is

expected to be introduced

from October and will aid

movement of trucks.

The announced GST rates are

as expected and its impact

on e-commerce merchants,

exporters and importers are

minimal. Despite the total

tax percent on logistics is

rising, the net impact on

logistics businesses would

be positive due to the input

credit claimable on expenses

which couldn’t be claimed for

in the past. For most logistics

services like e-commerce

logistics, warehousing and

air freight (export), the tax

rate is 18 percent, which is

an increase from the current

15 percent which includes

service tax and CESS.

The International Air Transport

Association (IATA) has

sought more clarification on

the application of GST as,

according to IATA, “there are

still information gap”. The

airline industry association has

supported its members with

GST compliance and related

activities in the lead-up to

implementation.

Mahesh Fogla, CFO, Patel

Integrated Logistics (PILL),

estimates that the transit time

from Bangalore to Kerala will

reduce by 8 to 10 hours. PILL

trucks used to halt at each

check post for minimum two

hours. Post GST, this is going

to change.

“This will ensure better

productivity in truck drivers

and most importantly the

fatigue factor will be less

enabling road safety and

better driving conditions.

As PILL branches are spread

across the country there is a lot

of paper work involved related

to compliance and passage

of goods, with e-way bills the

paper work will come down

and we also expect the costs

to come down,” said Fogla.

According to Fogla, Indian

industry and trade have

always moved its logistics

platforms to suit the cannons

of taxation. “Be it for sourcing

or for distribution logistics

taxation vis-à-vis state of origin

and destination decided

how and where products

should be stored, moved or

billed. With GST it’s going to

be one India and one tax.”

PILL has chalked out plans

to ride the tide and benefit

from it by getting into active

warehousing not only as a

product offering but also as a

backward/forward integration


Cover story | GST

for its clients supply chain.

After having series

of discussions with the

Government of India and

awareness programmes jointly

organised by the Federation of

Freight Forwarders’ Associations

in India (FFFAI) and allied

logistics associations, customs

broking/freight forwarding

community and logistics

companies in India are all set to

comply with the GST.

It is a well-accepted fact

that there would be direct

and immediate impact of

GST on the logistics industry

that includes customs

clearance, freight forwarding,

warehousing, distribution

and supply chain industry in

the country. It is also truly

estimated by the government

that GST would save companies

around $14 billion because it

would allow them to organise

their warehouses and supply

chains more efficiently. Firms

can now move to demand-

based "hub-and-spoke"

models used globally, rather

than operating state-by-

state. As a result, there would

be price corrections owing

to reduced logistics cost,

reduced transaction costs and

transit time, and hassle-free

transportation for domestic as

well as international shipments.

Hence, beneficiary would

be Indian manufacturers,

exporters and end users owing

to Indian products being very

competitive.

“The implementation

of GST has been at a

very appropriate time.

Government’s initiatives

like Make in India, Trade

Facilitation, Single Window

Customs Clearance, Ease of

Doing Business, Startup India

and impetus on domestic

consumption as well as cost

effective export cargo would

definitely receive tremendous

boost in long term. The urgent

need is to further strengthen

those initiatives through

appropriate infrastructure,

"The spin off effect on economy particularly on the logistics sector would also help both manufacturing and exports. The refund mechanism through an electronic platform will reduce transaction cost."

GaneSh Kumar GuPtaFIEO

seamless cargo movement

and rational/uniform tax

policy across the country with

proper implementation. GST

would not only reduce the

cascading tax burden it would

also accelerate seamless

cargo movement supported

by a robust warehousing and

distribution mechanism,” said

Samir J Shah, Chairman, FFFAI.

According to Shah,

now the concern area is

implementation of e-way bill

across the country in respect

of reaping the logistical

benefits of GST. FFFAI believes

the Government would

take quick and pragmatic

decision in this regard to fully

implement the much desired

and long debated tax reform.

FFFAI, however, welcomes

the government’s decision on

two-month relaxation in initial

filing requirements to abate

teething issues for the larger

interest of $2 trillion Indian

economy, making it more

organised.

India’s express industry

expects that the GST rollout

will reduce the overall cycle

time and cost. However, the

industry says it is concerned

about the government’s

proposal to ensure goods

move with e-waybills. “This

would potentially negate the

savings hoped for, and in

fact would lead to increase in

logistics costs and delays. At

a time when India’s Logistics

Performance Index (LPI)

ranking has started looking

up, it improved 19 places

in 2016, the introduction of

e-waybill as proposed has

potential to seriously erode

our LPI rankings,” said Vijay

Kumar, Chief Operating

Officer, Express Industry

Council of India (EICI).

According to Kumar users

of express delivery services

would face considerable

disruptions to their businesses

in the way e-waybill is being

introduced.

The e-waybill proposed by

the government entails that

the transporter logs into the

GST network and generate

an e-waybill for providing

vehicle number right from

the time your shipment is

picked up and then continue

to generate e-waybills each

time a vehicle is changed until

the shipments are delivered to

your consignee. On average

nearly 3 crore shipments are

handled daily by the express

delivery industry alone. And a

typical delivery cycle would

entail that the shipments are

on average transshipped 3-4

times. Each time a shipment

is transhipped to a different

vehicle the transporter

will have to log into the

GST network and generate

e-waybills. This would mean

over 9 crore entries in a day

which would translate to

about 3300 crore entries in

a year to be done by the

express industry alone. And if

all segments of transporters

are taken into account it

would mean billions of entries

in the GST network all to

ensure vehicle numbers are

captured.

While the mandatory

e-waybill may cause delays

initially and will certainly force

express industry players to

make necessary investment

upfront to move into a

complete digital transformation,

EICI’s view that the proposed

move is push down India’s

logistics performance index is

overly far-fetched.

“Instead of creating

a system which would

substantially delay delivery of

shipments and thereby destroy

value in the system as well

as push up our logistics costs

and inefficiencies, it would

be better if the GST network

creates a system which can

realise its objectives by risk

profiling and using the existing

track and trace systems of the

transporters,” suggests Kumar.

Ravichandran


Purushothaman, President,

Danfoss India, said the GST

regime will cause a “tectonic

shift” in India’s taxation history.

“I foresee transparency

in the business chain which

will enable significant value

creation for the Indian

economy. While this might

require a shift in mind-sets of

companies--from the way they

do business, to the fact that

all channels will have to be

digitalised at every stage--the

goal is perfection in execution

to achieve transformation,” said

Purushothaman.

Talking specifically

on the impact of GST

on manufacturing,

Purushothaman said while the

‘Make in India’ initiative was

started with the intention of

making India as one of the

top 10 manufacturing hubs

in the world, though there

have been several hurdles that

companies faced in terms of

cascading taxes. “With the

introduction of GST, it will help

streamline the sector, creating

a cooperative synergy in the

country. Some positive ways

in which the impact being

felt includes reduced cost of

production, supply of goods

with ease where we hope to

see decreased state-border

checks. The other side of the

coin is of course, increased

compliance requirements and

supply-chain restructuring that

might be required from the

company’s side.

“The implementation of

GST would impart much

needed competitiveness to

Indian exports with initial

hiccups. The spin off effect

on economy particularly on

the logistics sector would

also help both manufacturing

and exports. The refund

mechanism through an

electronic platform will reduce

transaction cost,” said Ganesh

Kumar Gupta, President,

Federation of Indian Export

Organisations (FIEO).

The Customs Departments

across India have modified its

software to comply with the

GST regime. In international

transport, under GST, the

most crucial aspect at the

moment is the e-portal of

Customs. Other players,

including carriers (ocean and

air), custodians (ports, airports,

container terminals and

container freight stations) and

Customs brokers, have been

preparing for the transition

and it should be a smooth

sailing. The logistics sector

more or less appears geared

to migrate to the new taxation

system. Reports suggest that

most stakeholders in the

international transport sector

are well-prepared and they

don’t anticipate any problems.

Anjani Mandal, CEO of

Fortigo Network said that there

is going to be direct and in-

direct boosts that the logistics

industry will see in the future.

"Be it for sourcing or for distribution logistics taxation vis-à-vis state of origin and destination decided how and where products should be stored, moved or billed. With GST it’s going to be one India and one tax."

maheSh FoGla Patel Integrated Logistics

“The intent, the laws,

the rules and the rates

for services creates the

correct environment for

the organising of the

unorganised sector and

encourages every player in

the highly fragmented road

transportation business to

support the government's

intent to maintain the chain of

clean business transactions,”

said Mandal, who co-founded

the logistics startup in the

trucking sector.

According to Mandal, the

combination of the rules on

e-way bill announced earlier,

the continuance of road

transportation services on a

reverse charge to be paid by

the service recipient and the

effective road transportation

rate being at 5 percent will

ensure that every participant

of the highly fragmented road

transportation industry feels

motivated to make a transition

to the organised sector.

exClusive| KeKu Bomi Gazder

Realising the importance and growth of air cargo industry and its impact on Indian economy, Airport Authority of India (AAI) incorporated an integrated logistics

network entity called AAI Cargo Logistics and Allied Services Company Limited (AAICLAS) last year. After almost a year of operations, AAICLAS has appointed

Keku Bomi Gazder as its new Ceo. With close to three decades of experience in airlines operations across the Middle East, South Asia and the Indian sub-continent

region, Gazder is passionate about his new role. Gazder is positive and believes that AAICLAS will be benchmarked against the best in the world. In his new office at Safdarjung Airport, New Delhi where he joined a month ago, Gazder discusses

with Rashmi Pradhan his plans and vision for AAICLAS. Edited excerpts.

AAICLAS will seta benchmark on ease

of doing businessindex at AAI airports

As the new Ceo of AAICLAS, what

would be your key priorities?

AAICLAS is a 100 percent subsidiary of

AAI. The vision of Chairman of AAICLAS,

Guruprasad Mohapatra and that of

the Board at AAICLAS, is very clear. We

will be focusing on cargo handling,

security and documentation handling,

supply chain, transshipment facility

provider, airport free zones developer

and project logistics. We would also

work as multi-modal interface linking air,

surface and water transport as well as

connecting to hinterland points in India,

thus, becoming the largest networked

and fastest growing logistics solution

provider in India.

We are here to serve the trade and

enable ease of doing business for our

trade partners by providing them with

a facility and service their products

deserve. When a manufacturer tells

his agent/forwarder/airline to use

our airport/facility for his goods; that

is what we want to achieve. Hence,

we are in the business of creating a

favourable environment to enhance

and promote business at our airports.

We want to grow our cargo business

and increase its share from all the

airports managed by AAI. This will

involve us being disruptive in our

current processes.


exClusive | KeKu Bomi Gazder

"We are expecting the business to grow by 10-15 percent in the current financial year and over 20 percent in the next fiscal year."

year and over 20 percent in the next fiscal

year. The mandate of AAICLAS is to focus

on cargo and increase the cargo handled

by our airports using best practices and

world class technologies. We are mandated

to perform all functions and explore

opportunities that contribute to the growth

of our airport related business. We will also

take into consideration our meetings and

discussions with various stakeholders in the

government and the private sector to see

the sectors that we need to focus on priority

to grow in the next five years.

How can AAICLAS benefit from

government’s UDAn scheme?

There is a study that has been initiated

to look at leveraging on government’s

Regional Connectivity Scheme under

UDAN - Ude Desh ka Aam Nagrik.

The aircraft under this initiative are

relatively small. We are exploring the

opportunities to move certain specialised

commodities through these aircraft.

We are also leveraging these airports to

be mini staging areas for our domestic

businesses.

What major initiatives of AAICLAS are

in the pipeline?

AAICLAS, in accordance to the road-map

prepared by AAI for the development of

Common User Domestic Cargo Terminals

(CUDCTs) at 24 AAI Airports, have been

taking forward the air cargo movements

at AAI airports in a phased manner

and commissioned the cargo facilities

during the FY 2016-17 at Ranchi, Goa, and

We are also going to benchmark

ourselves on best practices worldwide and

on the ease of doing business index. Some

of the questions I ask myself regularly are:

Why would a businessman, forwarder,

airline, integrator, manufacturer and various

other stakeholders in the supply chain

utilise our facilities? What is the best we

can offer differently? What additional value

are we bringing to the table? How can we

act as an enabler to promote trade in the

country? How can we make our airports

move from handling cargo to a super hub

for our airlines? These are my priorities to

answer. This is 2017 and now we need to

plan as where we want to reach by 2022. A

five-year vision document with details on

our verticals, a blueprint on how and where

the company will go forward along with

timelines is being currently worked on.

At the launch of AAICLAS, the Civil

Aviation Secretary had mentioned

that an annual turnover of Rs 380

crore is expected in two years; are

you on track to achieve the targets?

In the past 11 months, we have witnessed

a positive development in the cargo

movement at our airports. We are aiming

to achieve the target in the next financial

year. We are expecting the business to grow

by 10-15 percent in the current financial


"The company would enter into strategic partnerships based on business demand at airports within the country and abroad. For the first time, we will be open to investment outside India. We will invest in airports and facilities worldwide. Our collective expertise and knowledge in managing domestic facilities for over five decades gives us a strong edge over other operators."

Srinagar (interim) for Domestic Cargo;

Indore and Bhubaneswar for international

cargo and, Kolkata and Chennai for

international courier.

AAICLAS is planning to launch

CUDCTs during the FY 2017-18 at Pune

(launched), Guwahati, Tirupati, Lucknow,

Thiruvananthapuram, Varanasi, Amritsar,

Srinagar, Vijayawada and to undertake

international cargo handling operations at

Pune, Jaipur, Aurangabad, Visakhapatnam,

Madurai, Tiruchirappalli.

AAICLAS has taken the lead in the

Ministry of Civil Aviation’s initiative of

forming a National Air Cargo Community

System (ACS), a single window system

for uniform interface between all the

stake holders of air cargo community

using international standards; a common

information technology platform

connecting all the various stake holders to

streamline country’s air cargo industry on

one common platform.

Tell us about investments and

marketing strategy.

We will be heavily investing in our facilities,

training and development of manpower.

Although the figures cannot be disclosed

at this moment, we will make a significant

investment. A private organisation will do

business where it is profitable. But for us

Phot

o: A

AI

as part of the government, it is our duty to

facilitate the building of infrastructure even

where there is less commercial viability

keeping in mind its national obligations.

The company would enter into strategic

partnerships based on business demand at

airports within the country and abroad. For

the first time, we will be open to investment

outside India. We will invest in airports and

facilities worldwide. Our collective expertise

and knowledge in managing domestic

facilities for over five decades gives us a

strong edge over other operators. In certain

models at certain places we will invest in

facilities and third parties will manage them

whereas in some airports we will build the

facilities and operate the facilities ourselves.

We also have a strong mandate from the

board to explore cargo handling and allied

services abroad. On the marketing front,

we will conduct roadshows and participate

in exhibitions to promote our services.

We will also meet various stakeholders in

government and private sector to leverage

on our strengths.

How will the implementation of GST

affect the Indian air cargo industry?

It’s a complete game changer. But we need

to look at this in a broader spectrum. We

are business enablers and with Goods and

Services Tax (GST), the exporters of goods

will have less burden of taxes since the

place of consumption is overseas. This,

in my view, will help make businesses

more competitive in the international

market perhaps even opening India

to newer markets as well as export of

more commodities resulting therefore in

increased tonnage handling.


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¡ Regional Connectivity Scheme - UDAN by the Indian government to offer huge oppor tunity for inbound and outbound cargo movements.

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[email protected] [email protected]/ACI2018

FOR BOOKINGS CONTACT

Pharma Air Shipper Forum Partner

Silver Partner

FoCus | eThiopian CarGo Terminal

Ethiopia OpensAfrica’s ModernCargo TerminalWith the inauguration of the largest cargo terminal at the Addis Ababa Bole International Airport in Ethiopia, Africa is positioning itself in the global competitive market

RejI joHn

Ethiopian Airlines has

consistently maintained

its reputation of

offering the best

services to its passengers. It

has started to do the same for

its cargo services with bold

steps to increase investments

in world class cargo facilities

and in the most modern fleet of

aircraft. The recent inauguration

of a new cargo terminal, built

at a cost of $150 million, is

a manifestation of Africa’s

leading carrier’s commitment

to economic integration, one

of the key aspirations of the

African Union.

Having the largest cargo

terminal with the new

generation, high-performance

aircraft reflects the commitment

in expanding and supporting

the exponentially growing

imports and exports of the

country in particular and the

African continent in general.

Inaugurated by the

Ethiopian Prime Minister

Hailemariam Dessalegn on

the sidelines of the 'second

International Civil Aviation

Organization’s (ICAO) Meeting

on Air Cargo Development

in Africa', the cargo terminal

is built at the Addis Ababa

Bole International Airport on

a 150,000sqm plot. It has the

capacity to handle 600,000

tonnes of cargo per annum,

while the existing cargo

terminal has the capacity to

handle 350,000 tonnes of

cargo yearly.

The new cargo terminal

includes facilities such as dry

cargo terminal warehouse,

perishable cargo terminal


life science products.

Besides First lady Roman

Tesfaye and Olumuyiwa

Benard Aliu, president of the

ICAO Council, ministers from

the Ethiopian government,

more than 250 delegates,

who participated in the

Second ICAO Meeting on Air

Cargo Development in Africa

forum, senior executives of

the Ethiopian Civil Aviation

Authority and the Ethiopian

Airports Enterprise and flower

and vegetable exporters

attended the inaugural

ceremony.

Ethiopian Airlines Group CEO

Tewolde Gebremariam claims

that the new cargo terminal is

not only the largest in Africa

but it is one of the best in

world. “It is comparable with

the cargo terminals in Schiphol

Airport of Amsterdam, Changi

Airport of Singapore and Hong

Kong International Airport. With

this large and modern terminal

Africa can position itself in the

global competitive market,”

Tewolde said.

Prime Minister Hailemariam

said that he was delighted with

with cool chain storage,

fully automated with latest

technology ETV (Elevating

Transport Vehicle), G+2 office

building, apron area which

accommodates five additional

big freighter aircraft, sufficient

truck parking apron as well

as employees canteen and

washrooms. The new cargo

terminal is also fitted with

different climate chambers

for storage and handling of

temperature sensitive products

such as fresh agricultural

products, pharmaceuticals, and


the fast growth of the country’s

national carrier. Hailemariam

noted that Ethiopian’s global

network to more than 95

international destinations has

been facilitating tourism, trade

and investment to the country.

“Our foreign and domestic

investors are enjoying this

convenient, dependable and

economical air connectivity.

The success of our new

initiative of tourism sector

transformation depends on

our national flag carrier’s

vast network. Above all,

Ethiopian Airlines has played

an important and irreplaceable

role in the development of

our horticultural products

export and foreign exchange

earnings,” Hailemariam said.

The Prime Minister

used the opportunity to

invite global companies

to invest in the booming

horticulture development and

manufacturing sectors.

The cargo terminal has

various compartments

dedicated for fruits,

vegetables, flower, meat,

pharmaceuticals, and other

export items. It has four

modern electronic transport

vehicles and it can store 900

airplane pallets at a time. It

has eight lanes exiting to the

ramp, and it can load eight

airplanes at a time and the

ramp can accommodate

five Boeing B777 dedicated

freighter aircraft at a time.

It can dock 18 trucks at a

time unloading fresh flowers,

vegetables, fruits, meat,

textile, leather articles and

pharmaceuticals.

FoCus | eThiopian CarGo Terminal

"It is comparable with the cargo terminals in Schiphol Airport of Amsterdam, Changi Airport of Singapore and Hong Kong International Airport. With this large and modern terminal Africa can position itself in the global competitive market."

tewolde Gebremariam Ethiopian Airlines

“With modern B777 freighter

aircraft each with a hauling

capacity of 100 tonnes of

cargo and a state-of-the-art

cargo terminal with a capacity

Hailemariam Dessalegn, Prime Minister of Ethiopia

Cold rooms in the new cargo terminal

"With modern B777 freighter aircraft each with a hauling capacity of 100 tonnes of cargo and a state-of-the-art cargo terminal with a capacity to accommodate close to one million tonnes of cargo we are now globally competitive. Since Ethiopia is a landlocked country it should have a vibrant air cargo sector."

FiStum abady Ethiopian Cargo

to accommodate close to one

million tonnes of cargo we

are now globally competitive.

Since Ethiopia is a landlocked

country it should have a vibrant

air cargo sector,” said Fistum

Abady, Managing Director,

Ethiopian Cargo.

At the inauguration Tewolde

revealed that Ethiopian Cargo

has already partnered with

DHL, a global forwarding

company to enter into the

600,000 tonnes of cargo.

The French Development

Bank, AFD, financed the

construction of the cargo

terminal while the German

Export Credit Agency KFW

financed the electro mechanical

work. The new cargo terminal

civil work is done by Varnero

while UNITECH, the German

cold store technology

company, supplied and

installed all the cargo handling

system.

While the new terminal has

been formally inaugurated,

actual commercial operations

would only begin from

September this year.

Ethiopian Cargo and

Logistics Services would soon

commence work on the third

cargo terminal expansion

project which will have

additional 600,000 tonnes of

cargo handling capacity. When

the third terminal is completed

Addis Ababa would be one of

the top ten leading cargo hubs

in the world.

In line with the Vision

2025, Ethiopian Cargo will

eventually build facilities to

handle 1.2million tonnes of

cargo annually and serve

47 destinations using 18

freighter aircraft.

multi modal logistics business.

“With double digit GDP growth

and ongoing industrialisation

process the country badly

needs an integrated logistics

services. The logistics sector

should prepare itself to handle

the growing import and export

sector,” Tewolde said.

Ever since the first cargo

charter operation was launched

to Nairobi in 1946 and the

boom of agricultural export

products out of Ethiopia,

Ethiopian’s cargo service has

been steadily growing since

the early 1970 Ethiopian Cargo

& Logistics Service is now one

of the seven strategic business

units of the Ethiopian Airlines

Group established under

the Vision 2025, the national

carrier’s 15 year growth strategic

road-map launched in 2010.

With eight dedicated freighter

aircraft (six B777 and two B757)

Ethiopian Cargo has a daily

uplift capacity of 8,672 tonnes

that makes it the largest cargo

operator in Africa.

Ethiopian inaugurated

the first expansion of the

cargo terminal in 2006 and

is now planning to launch

the third expansion project-

terminal III with the capacity

of accommodating additional

The cargo terminal inside



rePort | iCao

Unlocking the hidden potential to driveAfrica’s air cargo growth

said the president of the ICAO

Council, Dr Olumuyiwa Benard

Aliu while addressing the

conference participants.

The three-day event

witnessed participation of

shippers, airlines, airports,

freight forwarders, regulatory

authorities - all the key

stakeholders from the aviation

sector, to discuss sustainable

solutions to drive air cargo

growth in Africa.

The primary objective of the

Lomé Declaration is to enable

the unobstructed flow and

rapid release of goods through

enhanced trade facilitation and

custom clearance frameworks.

The key outcome was the

adoption of a new Statement

on the Implementation of the

Lomé Declaration, reaffirming

commitment to the sustainable

development of air cargo in

Africa.

“In Africa today, aviation

supports millions of jobs and $72

billion in GDP. The importance

of air freight as a key enabler of

international trade, especially on

high value and time-sensitive

goods, is reflected in the fact

that air transport carries around

It’s time to unlock the

hidden potential in Africa’s

aviation sector, industry

participants at the second

ICAO meeting on Air cargo

development in Africa held in

Addis Ababa last month said

in consensus.

Technological innovation,

regulatory reform and

investment in infrastructure will

be crucial for Africa’s growth

in air cargo segment. And the

full implementation of the

Lomé Declaration will drive

the air cargo segment growth,

The 'Second ICAO Meeting on Air Cargo Development in Africa' held in Addis Ababa last month reiterated the fact that the continent has tremendous potential waiting to be unlocked. Enhanced investments in technology and infrastructure as well as creating a favourable regulatory environment, will be key drivers for Africa’s air cargo growth.

TWInKLe SAHITA


35 percent of world trade by

value,” Dr Aliu remarked. He also

added that growth in African

freight traffic outpaced the

global average last year and that

cargo capacity offered by African

carriers in the region surged by

over 20 percent in 2016.

Dr Aliu noted that progress

in support of the Declaration

should be achieved through

the ratification of the 1999

Convention for the Unification

of Certain Rules for International

Carriage by Air, to which only

56 percent of African states

have adhered, the realisation

of the ambitious ‘E-Trade

for All’ initiative. This, ICAO is

undertaking in collaboration

with other UN agencies. The

deployment of the Cargo

Service Quality Index for

measuring freight performance

at the airport level, a project

that ICAO is developing with

the International Air Cargo

Association.

Innovation is particularly

crucial as e-commerce will

continue to be a significant

driver of this growth. “The air

cargo share of items purchased

online grew from 16 percent

to 74 percent between 2010

and 2015 and is projected to

reach 91 percent by 2025. The

number of parcels flown by air

has increased from around 130

million in 2011 to around 400

million in 2015, at a staggering

30 percent average annual

growth rate,” Dr Aliu explained.

Progress on the

implementation of the Lomé

Declaration furthermore

requires enhanced investment

in ground infrastructure, aircraft,

and human resources.

One of the major areas of

challenges widely discussed

was the slow implementation

of the Yamoussoukro

Declaration that has created

regulatory impediments to

investments into aviation

and therefore resulting in

lower connectivity and less

competitiveness. In order

to advance the concrete

implementation of the

African Union (AU) Agenda

2063 on the creation of a

Single African Air Transport

Market (SAATM) through the

Yamoussoukro Decision by

2017 July, 17 African states have

committed themselves to the

implementation of the SAATM.

Tewolde Gebremariam,

Group chief executive officer

of Ethiopian Airlines, reiterated

the aviation sector’s role

for public transport service

in Africa, indicated that air

cargo is the most important

factor for the socio-economic

development of Africa than

any other part of the world,

where infrastructures for

other modes of transport are

underdeveloped. He also

indicated that for African

countries, possessing an

economy largely dominated

by agricultural and

horticultural products export,

air cargo is an ideal option.

He stated, “Kenyan flowers,

Ethiopian flowers, all depend

on air cargo.”

Gebremariam also urged

all stakeholders to join hands

and save Africa’s air transport

industry sector, saying that “the

industry in Africa is dying. All of

us have to join hands to save the

industry from its natural death.”

Sanjeev Gadhia, founder

and CEO of Astral Aviation,

expressed his concerns over

the competition of African

carriers with the Middle Eastern

carriers. He highlighted the

need for African carriers to

increase co-operation amongst

each other to withstand

competition against the Middle

Eastern carriers. Considering

that pharmaceuticals

represent a major segment

for Africa, Gadhia of Kenya

based cargo airline, Astral

Aviation, added, “There is lack

of cooling infrastructure for

pharma air shipments in the

primary African airports. We

need to work on improving

infrastructure to handle

this temperature sensitive

commodity efficiently.”

Vladimir Zubkov, secretary

general, TIACA, cited few issues

that need to be resolved quickly.

Some of them are connectivity,

facilitation of electronic

processes, introducing

single window processes,

implementation of risk

management border control.

“There is a demand for

action on the regulatory side,”

said Zubkov. To add to that,

Chris Welsh, secretary general,

Global Shippers’ Forum, said,

“Create the right regulatory and

commercial environment for

African industry to compete

internationally.”

Welsh added, “Infrastructure

investment is a vital ingredient

for successful aviation sector

in Africa.” Presenting shippers’

point of view, he added, “For

shippers’, industry investment

in airport capacity, cargo

facilities is key for connectivity

and access to intra African and

global markets.” He finds the

need to streamline procedures

at international airports.

The good news is that

one of the major IT solutions

provider CHAMP Cargosystems

is optimistic of the fact that

African air cargo industry will

slowly embrace technological

innovations to deal with the

existing problems. “We are

already supporting 51 customs

in Africa with IT solutions,”

said one of the company

representatives.

Customs and other

regulatory agencies in Africa

are problematic links in global

supply chain due to prolonged/

slow bureaucratic processes.

Fitsum Abady, managing

director, Ethiopian Cargo

Services, was of the view that

single window initiative will

ease the processes for traders

and also help cross border

e-commerce by facilitating

timely movement of goods.

The conference participants

also acknowledged the fact

that intra-Africa air cargo

services’ liberalisation should be

considered by the African states.

Organised by ICAO

in cooperation with the

Ethiopian Civil Aviation

Authority, Ethiopian Airlines

and The International Air

Cargo Association, the

Second Meeting on 'Air

Cargo Development in Africa'

was opened by Getachew

Mengiste, State Minister,

Ministry of Public Enterprises

of Ethiopia. It was attended by

247 participants representing

21 states, seven international

organisations, and industry

stakeholders from Africa, Asia-

Pacific, the Caribbean, the

Middle East, Europe and North

America.


intervieW | Bernard GuSTin

"The demand for direct flights for passengers as well as for cargo is high. With our

new service, we offer the diamond and travel industry

direct flights. This is an important investment in our network expansion, but also in the economic relations

between India and Belgium.”

bets big on IndiaBrussels Airlines


How important is cargo in your

overall business strategy?

The cargo category is completely inte-

grated into the success of our long haul

strategy since the start of the time. The

cargo component is extremely important

to us and it is completely integrated into

the overall strategy. We don’t have any

ambition to go for full freighter service

but when we do our business case we

really consider both ends and we have

really considered both markets. We see

ourselves as a carrier that moves people

and goods. Do not like to see ourselves

as a passenger airline doing a little bit of

cargo on the side.

What is your consideration of African

destinations in your network?

You can have shipments loaded in India

but within 24 hours they could be in

Africa and vice versa. That is what we are

able to offer on our network connect-

ing India with African destinations. For

instance, India produces lot of medicines

and they are exported to African coun-

tries. We believe that there is a lot of links

Brussels Airlines launched its service from Belgian capital to Mumbai last month, its first flight to Asia and the launch is a part of Lufthansa group's strategy to expand its business in India. Lufthansa took control of Brussels Airlines last December. The Mumbai-Brussels route was served by Jet Airways till last March and Brussels was even the European gateway for the Indian airline. But Jet Airways pulled out of the route as it found it to be unviable. Bernard Gustin, Chief Executive Officer, Brussels Airlines, who was in India along with a Belgian trade delegation led by the Secretary of State for Foreign Trade Pieter De Crem, is highly optimistic about success in India. Gustin speaks to Reji John about the initial response to the flight launched and the importance of cargo in the overall business strategy of the carrier. Edited Excerpts:

What are your thoughts on the direct

flight between Brussels and Mumbai?

Belgium and India are very strong trad-

ing partners. It is interesting to see that

within the European Union we are a key

trading partner with India. So there are

very strong economic links between the

two countries and there is a market for

both passenger and cargo.

What is your evaluation of the direct

flights that is operational for close to

a month?

I’m very satisfied with the start. It’s just four

weeks in operation. It’s better to begin

with a strong start. I know that not all

the processes are in place yet to allow us

to have a full-fledged operation. On the

cargo side, we are yet to start to spread our

wings. I was expecting a softer start. The

average load factor for the first four weeks

has been around 75 percent and that to me

is very good and we are happy about it.

Do you intend to increase the

frequency to Mumbai and add more

destinations in India?

Success calls for success and all depends

on results. If our results are positive, so

far they are positive, we will consider. But

it’s too early to take a judgment and we

should learn to walk before running but

it’s clear that the trend remains as it is.

We have room for a daily product and

later on for further development in

India knowing that we extend our

long haul network substantially.

Lately with the US and Africa,

we shouldn’t forget these two

regions as well because it’s

always a question of equi-

librium. If we add some US

destinations it also helps the

Indian traffic. So it’s always

important to have the right

balance.

that the Brussels Airlines and Brussels

Airport have developed to enhance this

business. Pharmaceutical is a sector in

which, on the cargo side, we can do a lot

together. Not to forget another key sector

the diamond industry. Therefore it means

that we really see a business on cargo

between India and rest of the world.

What is your value proposition to

your cargo customers particularly at a

time when yields are on the decline?

We are not full freight carrier so that

allows us to have a balance between

the passenger and the cargo. However,

I think on the cargo side we need to be

competitive. We can also differentiate

ourselves on two axis: the first one by the

quality of the product we offer. We pro-

pose products especially for fresh pro-

duce transport. The connection is perfect

and so with all those perishable foods

and so especially in India and Africa we

have developed dedicated business

which might be less yield-sensitive so we

are going to focus on niche products like

temperature control cargo.

Bernard gustin (R) with Pieter De Crem, Secretary of State for Foreign Trade, Belgium (L) during the official launch of the flight in Mumbai



NEWS

The 44th Annual Convention of

the Air Cargo Agents Association

of India (ACAAI) will be held from

November 9-12, 2017 at Bali,

Indonesia. The convention will

take place at The Sheraton Bali

Kuta Resort. Last year, the ACAAI

Convention was held in Europe

at Athens, Greece. The first ever

convention in Europe. The theme

of the convention was ‘Resurgence

of Air Logistics in India’.

At the time when the air

cargo industry is on a growth

trajectory, conventions play a

vital role in discussing industry

related topics, exchange of

knowledge, experiences and

best practices. The air cargo

industry presents a wide variety

of service providers coming

together to move goods both

domestically and internationally

with a single-minded purpose of

faster and efficient delivery. The

air cargo logistics plays a vital role

in the economic development

of a country. Airlines, air cargo

terminal operators, ground

handling service providers,

integrated express service

providers, forwarders, domestic

cargo transport service providers

and custom house agents are the

key players in the entire air cargo

supply chain.

ACAAI Convention to be held in Bali from November 9-12

GMR Goa International Airport finalises fund raising for Mopa airport

Global carriers, PE firms keen to acquire stake in Jet Airways

Global carriers Lufthansa and

KLM-Air France, bulge bracket

private equity funds including the

Blackstone Group, KKR & Co and TPG

Capital along with US airlines Delta

are reportedly interested in investing

in India’s second largest airline Jet

Airways, according to an Economic

Times report.

Jet Airways is looking to raise

capital to fund its fleet induction and

expansion plans.

The airline, in which Abu Dhabi’s

Etihad Airways owns a 24 percent

stake, has adopted a network

strategy independent of its investor

and has roped in JP Morgan to raise

funds, including through a possible

stake sale. However, no binding

offers have come in as yet.

Indian rules allow 100 percent FDI

in scheduled commercial airlines but

foreign airlines, though, are barred

from holding equity stake in Indian

carriers above 49 percent. With

Etihad already on board, Jet only has

limited headroom and can bring on

board another strategic partner by

selling up to 24 percent stake in the

airline.

With a current market cap of Rs

6,880.59 crore, a 24 per cent stake

sale could help raise Rs 1651.2 crore

($256 million).

GMR Goa International Airports Limited (GGIAL), a

subsidiary of GMR Airports Limited has successfully

executed debt facility agreement for the Phase-1

development of greenfield airport at Mopa.

GMR Airports Ltd had won the bid to develop

and operate the greenfield airport at Mopa in North

Goa last year and the concession agreement was

signed in November, 2016. The foundation stone for

the project was subsequently laid by Prime Minister

Narendra Modi in November 2016.

On the occasion of signing of financing

agreements, Srinivas Bommidala, chairman

airports, GMR Group, said, “GMR Group is delighted

to be partnering with Government of Goa for

development of a new civilian airport, which

will become the gateway to the state of Goa.

Having tied up funding for the project, we are

working towards starting on ground construction

activity post monsoon. We are confident that the

development of the new airport will significantly

boost tourism in Goa and also lead to generation of

employment opportunities for Goans”.

Sidharath Kapur, president, GMR Airports Ltd,

added, “The entire debt of Rs. 1330 crores was

underwritten by Axis Bank on long tenor door

to door basis of 18 years on competitive terms.

The confidence of banks on the project reflects

the intrinsic strength of the project and also the

operational and delivery capability of the Sponsor

GMR Airports Ltd”.

Goa has been witnessing an aviation boom

with traffic at the existing Dabolim growing at

a near 30 percent rate annually for the past 3

financial years.

As per the concession agreement, GMR will

design, build, finance and operate the international

airport for 40 years with extension option for

another 20 years, said the company in a press

release. The greenfield airport will be developed in

stages and will be scaled up as per traffic growth

demands. The airport will be a full-service airport

catering to domestic and international passenger

besides freight services.


NEWS

Turkish Cargo adds Johannesburg, Madagascar and Kano to its network

Reliance aerospace park in Nagpur gets approval

Turkish Cargo has launched

its scheduled cargo flights to

Johannesburg, the biggest industrial

and commercial center in South

Africa, and Madagascar, the largest

island of Vanilla Islands, on July 1. It

also began operating flights to Kano

from July 4. Kano is the second

destination in Nigeria that Turkish

Cargo operates after Lagos.

The cargo carrier’s plan to start

services from Johannesburg is to tap

the export markets in the European

countries and America. The

products exported from South Africa

generally consist of machinery,

electrical à electronic equipment,

chemicals and automotive parts,

and such products are mainly

exported by air cargo and currently

carried by passenger flights

operated by Turkish Airlines.

The eastern coastal city of

Madagascar also exports a wide

range of goods mainly vanilla,

tropical fruits and textile products to

European and American countries

while live crabs and sea products

are transported to the Far East from

Madagascar.

The cargo flights, to be initiated

to these destinations by Turkish

Cargo, will allow diversification

in terms of variety of products

transported.

Meanwhile, the addition of

the Kano service will help direct

connections to important markets

such as India and Sudan, which

were earlier routed via Lagos.

PM Modi announces Delhi-Mumbai-Tel Aviv flight service

Prime Minister Narendra

Modi during his visit to Israel,

announced plans to launch flight

service to Tel Aviv from Delhi

and Mumbai. In a major outreach

to the Indian diaspora in Israel,

PM Modi announced the plan

and urged them to visit India

more often.

“Now a Delhi-Mumbai-Tel

Aviv air service will be initiated.

And so I invite youth of Israel to

visit India,” he said.

He also promised to ease the

process of acquiring Overseas

Citizen of India (OCI) and Person

of Indian Origin (PIO) cards by

Israelis of Indian origin. People of

Indian community who have done

compulsory army service in Israel

will be eligible for OCI cards.

Air India used to operate directs

flights to Israel from Delhi until

mid-1990s and Mumbai until early

2000. The flights were withdrawn

for commercial reasons.

THE proposal for the development of Dhirubhai Ambani

Aerospace Park with related infrastructure facilities and

services at Mihan SEZ (Nagpur) has received a nod from

the Board of Approval (BoA) for special economic zone

(SEZ) under the Ministry of Commerce.

An official statement said, “With the BoA nod, the

Dhirubhai Ambani Aerospace Park (DAAP) at Mihan,

spread over 289 acres, will become the largest greenfield

aerospace park in the country. In the first phase,

development will be spread over 104 acres and the

second phase will cover an additional area of 185 acres.”

Business at the park is expected to exceed Rs

200,000 crore over next 30 years, the company said.

“The aerospace park will also be home to the Dassault

Reliance Aerospace Limited joint venture, which is

presently creating the state-of-the-art integrated eco

structure to execute the Rs 30,000 crore offset program

linked to the sale of 36 Rafale Fighter Jets.”

The construction at the aerospace park is expected

to start by end of the month with production starting

in the first quarter of 2018.

The park with a proposed investment by Reliance

of Rs 6,500 crore is expected to generate more than

10,000 skilled jobs, promoting ‘Make in India’ and ‘Skill

India’ initiatives of the government.

In the first phase, projects like production of

aircraft, electronic warfare systems, radars, unmanned

aerial vehicles (UAVs), maintenance repair and

overhaul for commercial aircraft and complete eco-

system of tiered suppliers to support these large

projects have been incorporated.


Air India launches Delhi-Washington flight

India-Task Force on Civil Aviation launched

India back at top of domestic air travel growth chart globally: IATA

NEWS

State-owned Air India

commenced its first flight to

Washington DC from New

Delhi, which would be its fifth

destination in the US.

Air India has deployed its

238-seater Boeing 777-200 LR

aircraft to cater to the new

direct service. The plane offers

eight seats in first class, 35 in

business and 195 in economy

class.

The launch took place at

the Indira Gandhi International

(IGI) Airport in the presence of

Charge de Affairs of US Embassy

Marykay Loss Carlson, Air

India Chairman and Managing

Director Ashwani Lohani,

Commercial Director of Air India

Pankaj Shrivastava, among other

airline officials.

The occupancy on flights to

Washington is at 90 per cent for

the month of July, according

to an airline spokesperson. The

service to the US capital will be

offered three times a week.

Apart from Washington, Air

India flies to four US airports

– New York, Newark, Chicago

and San Francisco. While there

are daily services available for

Newark, New York and Chicago,

the Delhi-San Francisco flight is

operated six times a week.

The national carrier seeks to

expand its network by adding

other destinations in the US, such

as Los Angeles and Houston.

India has reclaimed its position

as the world’s fastest growing

domestic air travel market in May

after a temporary blip, according

to International Air Transport

Association (IATA). According

to data released by IATA, India’s

passenger traffic grew by 17.7

percent in May from 15.3 percent

in April 2017. Till March 2017, India

had also topped the domestic

charts for the highest growth

rates for 23 months in a row.

India regained the top position

in domestic revenue passenger

kilometres (RPK) and available

seat kilometres (ASK) among all

major aviation markets, says the

latest release.

India’s domestic RPK — which

measures actual passenger

traffic — rose by more than 17

percent in May compared with

the corresponding month of the

previous year.

It was followed by that of

China at 16.8 percent, Russia at

12.8 percent and Japan at 10.3

percent.

The country’s domestic ASK

— which measures available

passenger capacity — edged

higher by 14.7 percent in May,

followed by China at 14.4 percent

and Russia at 12.6 percent.

In addition, the association said

the global RPK rose by 7.7 percent

and the global ASK by 6.1 percent.

“Passenger demand is

solid. And we don’t foresee

any weakening over the busy

summer months in the Northern

Hemisphere. But the rising price

of fuel and other input costs is

likely to see airlines’ ability to

stimulate markets with lower

fares taper over the coming

months,” said Alexandre de

Juniac, Director General and

CEO, IATA.

The US-India Business Council (USIBC) has launched its India-

Task Force on Civil Aviation that will focus on identifying

opportunities for implementation based on the National Civil

Aviation Policy (NCAP). To spearhead this initiative, Palash Roy

Chowdhury, managing director-India, Pratt & Whitney has been

chosen as the chairman and Amber Dubey, head of aerospace

and defense, KPMG in India as co-chairman.

India has witnessed annual growth exceeding 20 percent in

domestic traffic with total passenger throughput estimated to

reach 270 million passengers by end of this year. The task force

will engage with various stakeholders to promote international

best practices and address potential hurdles that surface as

American and Indian companies deepen engagement in India’s

burgeoning civil aviation market.

Commenting on the launch, Mukesh Aghi, President of the

US-India Business Council said, “We are launching this task

force to aid implementation of India’s civil aviation policy.

Our member companies are committed to the success of

the government’s flagship programs such as the Regional

Connectivity Scheme and Make in India, and bringing the best

in technology in related areas such as airport infrastructure and

security, MROs and skill development.”

Palash Roy Chowdhury, managing director-India, Pratt &

Whitney and Chairman of the India-Task Force on Civil Aviation

said, “I am honored to be entrusted with the responsibility of

leading this initiative at a time when the Indian aviation industry

is poised to scale new heights. With the task force, we intend

to support growth of US corporations in India by aligning with

the priority areas of the Indian government and further nurture

the spirit of entrepreneurship and job creation to successfully

contribute to the global economy in the coming years.”

On being elected as the co-chairman, Dubey said, “India is

at the cusp of rapid strides in the aviation and aerospace sector.

This is thanks to low oil prices, growing demand and industry-

friendly government policies. I’m honored to be elected and

would try my best to make the task force achieve its objectives.”


Panel of union ministers’ to oversee process of Air India stake sale

AirAsia India to start inter-national flights

NEWS

A panel consisting Nitin

Gadkari, Suresh Prabhu, Piyush

Goyal, Ashok Gajapathi Raju

and headed by finance minister

Arun Jaitley will finalise the

structure and procedure of

privatizing Air India.

The process might start by

December as the government

wants the process to be

finalised speedily.

The Union cabinet cleared

the divestment of debt-

laden Air India and five of its

subsidiaries last week. It said

the ministerial panel will decide

on how much stake will be

divested and the universe of

bidders — whether a foreign

company can bid.

The panel will also determine

how the airline’s unsustainable

debt will be treated, the spinning

off of assets to a shell company,

and demerger and strategic

disinvestment of three profit-

making subsidiaries.

The government decided to

sell Air India after hopes of the

airline’s revival turned bleak.

The national carrier has a total

debt of around Rs 50,000 crore

and an annual interest outgo of

Rs 4,500 crore. It is surviving on

a 2012 bailout package, under

which it has so far received Rs

24,000 crore.

Last month NITI Aayog

had recommended complete

divestment of Air India.

AirAsia India has plans to widen its

fleet to 20 planes by September-

October and commence

international operations thereafter,

its CEO Amar Abrol has reportedly

said.

According to India’s aviation

policy, any domestic airline with

a fleet size of at least 20 aircraft

will be eligible for international

operations. AirAsia India currently

has a fleet of 10 Airbus A320

planes.

Abrol said the initial international

destinations in the airline’s plan

would naturally be those in

Southeast Asia, the stronghold of its

parent AirAsia Berhad.

He also added that AirAsia India

would stick to its earlier target of

doubling revenue and passenger

traffic this year although he

declined to give any projection on

profitability.

Government nod for airport at Jewar in Greater Noida

The Government has granted in-principle

approval for a greenfield airport at Jewar in

Greater Noida in view of the rapidly growing

flying requirements of the NCR region.

Announcing this at a press conference in

New Delhi, the Minister for Civil Aviation

Ashok Gajapathi Raju said that the air traffic

in the NCR region is growing very fast. From

the current level of 62 million passengers per

annum (MPPA), it is expected to reach upto 91

MPPA by 2020 and 109 MPPA by 2024, which

would be the saturation point for the Indira

Gandhi International Airport in Delhi. So Delhi

will require a second airport in the next 7-10

years. The minister said that the government

of Uttar Pradesh had submitted a proposal for

construction of a new greenfield international

airport at Jewar in Greater Noida, and the

Ministry of Civil Aviation has accorded in

principle approval for the project based

on the recommendations of the Steering

Committee on Greenfield Airports, headed by

the Secretary (CA).

The Noida International Airport will be

located 72 kilometers from IGI Airport and

65 kilometers from Hindon Air Force station

Ghaziabad. Yamuna Expressway Industrial

Development Authority (YEIDA) is the

implementing authority of the project. An

area of 3000 hectares has been notified for

the airport which will be developed in phases.

An area of 1000 hectares will be developed

in the first phase at an estimated cost of Rs

10,000 crores. There will be one runway in

the first phase. Three more runways will be

developed in subsequent phases. The total

cost of development of all phases is expected

to be around Rs 15-20,000 crores. The airport is

expected to cater to 30-50 million passengers

per year over the next 10 to 15 years.

Government of UP along with YEIDA will bear

the cost of land procurement. The project will

be implemented in the PPP mode for which

concessionaire is to be identified based on

open market competitive bidding process.

Also speaking on the occasion, MoS Civil

Aviation Jayant Sinha said that the airport is not

only important for the NCR region but also for

western Uttar Pradesh. It will also encourage

more industrialization.

Secretary Civil Aviation RN Choubey

informed that metro connectivity was being

extended to Jewar, and so the airport would

have multi modal connectivity by road and rail.

He said that UP Government and YEIDA will be

preparing the Techno- Economic Feasibility

Report for the project. The airport is expected

to be operational within next 4-5 years.


Alliance Air announces launch of flights connecting Lucknow with Bhopal, Jaipur, Dehradun

AirAsia purchases 14 more A320ceo aircraft

SpiceJet to buy 50 Q400 turboprops aircraft from Bombardier

Air India’s subsidiary Alliance

Air has announced the launch

of new flights connecting

Lucknow with Bhopal, Jaipur and

Dehradun.

The move is reportedly aimed

at developing Lucknow, the

capital of Uttar Pradesh, as a

regional hub of Alliance Air.

With effect from July 5,

Alliance Air will be operating new

flights on Lucknow-Dehradun,

Lucknow-Bhopal and Lucknow-

Jaipur routes.

“Alliance Air will be the first

carrier to provide connectivity on

these routes,” the airline said in a

statement.

These flights will be operated

by the regional airline’s 70-seater

ATR 72 aircraft.

“We are offering attractive

air fares on all these flights,” the

statement added.

The airline under the

government’s regional

connectivity scheme recently

launched services on Delhi-

Shimla- Delhi and Delhi-Gwalior-

Indore-Mumbai sectors.

Alliance Air was awarded 15

RCS routes out of the total 128,

but the airline plans to offer

additional flights on short sectors.

The three new flights announced

today are part of that initiative.

NEWS

To meet with the growth on the carrier’s regional network,

AirAsia has signed an agreement with Airbus to buy 14 more

A320ceo aircraft. The contract, which is subject to AirAsia

board approval, was announced at the Paris Air Show.

Taking into account the latest order, the total number

of A320 family aircraft ordered by AirAsia will touch 592 in

numbers. This makes AirAsia the largest airline customer for

the Airbus single aisle product line. To date, 171 A320ceo and

eight A320neo have already been delivered to the airline and

are flying with its units in Malaysia, India, Indonesia, Thailand

and the Philippines.

Tony Fernandes, AirAsia Group Chief Executive Officer

said, “Demand is very strong in AirAsia’s traditional countries,

but now we have Indonesia, Philippines and India doing

extremely well. The robust demand has led us to expand our

fleet, and Airbus has been a great partner in finding us slots.

The competitive environment is at its best, coupled with a

stable oil price. With the lowest cost in the world, AirAsia is

back on aggressive growth.”

Said John Leahy, Chief Operating Officer Customers, Airbus

Commercial Aircraft, “We are pleased to announce our latest

agreement from AirAsia. We are proud that the A320 Family has

played an important role in the success of AirAsia, providing

the efficiency and reliability needed for the airline to keep its

costs as low as possible. We look forward to working with

AirAsia as it continues on its exciting journey, enabling more

people to fly, more often, and at an affordable cost.”

SpiceJet has decided to spend

$1.7 billion on 50 Q400 turboprop

airliners from Bombardier

Commercial Aircraft.

The budget carrier signed a

letter of intent (LOI) during the

International Paris Air Show. The

LOI includes 25 Q400 turboprops

and purchase rights on an

additional 25 aircraft. This would

be the single biggest order for

the Q400.

“I am delighted to announce

this new order for 50 Q400

planes. SpiceJet operates India’s

largest regional fleet and is the

only organized operator in this

space. This order will help us

further increase connectivity to

smaller towns and cities and help

realise Prime Minister Narendra

Modi’s vision of ensuring that

every Indian can fly,” said Ajay

Singh, chairman and managing

director, SpiceJet.

“I congratulate SpiceJet on

this new order for 50 Q400

planes. This latest aircraft order

by SpiceJet, which has been

an enthusiastic supporter and

participant of India’s regional

connectivity scheme, will

help further take forward the

government’s vision to provide

air connectivity to the common

man,” said RN Choubey,

Secretary, Ministry of Civil

Aviation.

“We are proud to sign this

agreement as it is another

demonstration of the Q400’s

superiority in the turboprop

market. When finalised, the

repeat order will increase the

Q400 aircraft fleet in the fast-

growing market in the APAC

region and will launch the

high-density 86-passenger model

of the Q400 aircraft in India,”

said Fred Cromer, President,

Bombardier Commercial Aircraft.

“This is also compelling evidence

that the demand for turboprop

aircraft is healthy in short-to

medium-haul markets that can’t

economically support jets.”

SpiceJet operates a fleet of

35 Next-Generation 737s and 20

Bombardier Q400s. Since 2010,

It has taken delivery of 15 Q400

aircraft. The airline currently

operates 20 Q400 aircraft in a

78-seat configuration to domestic

and international destinations.

When concluded, this fleet

expansion will provide SpiceJet

the ability to grow profitably

and leverage the robust demand

forecast in the world’s fastest

growing regional aviation market.

Bombardier’s Q Series

turboprops and CRJ Series

regional jets have made

significant advances in

the APACregion where

approximately 190 aircraft –

including more than 165 Q Series

turboprops — are in service with

or on order by over 25 customers

and operators. Bombardier has

recorded firm orders for a total

of 585 Q400 aircraft.

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