Dunlop Aircraft Tyres (Booth M93) is exhibiting new radial tires for regional aircraft including the Embraer E-Jets and ATR 42/72. “This product innovation, combined with our new tire distribution and retreading facility in China, gives aircraft operators increased choice…in this expanding market,” said Ian Edmonson, the company’s chairman. Dunlop’s Asia Pacific customers include China Eastern Airways, Lion Air, SpiceJet and Qantas link.
New relationships are changing the Asia Pacific’s airline landscape as it enters a new stage of maturity with once-fierce opponents forming partnerships for reciprocal gains. Overcapacity in fleet numbers has fueled competition and compelled budget carriers to look at cooperation initiatives despite the budget airline industry’s penchant to avoid complexity.
The U.S. Federal Aviation Administration has downgraded its International Aviation Safety Assessment (IASA) program rating of India from a Category 1 to a Category 2 based on a recent reassessment of the country’s civil aviation authority. Under Category 2, India’s airlines can continue to fly existing service to the U.S., but they cannot establish any new service until the FAA reinstates the country’s Category 1 status.
Clearance of Etihad Airways’s $380 million investment in Jet Airways by India’s Foreign Investment Promotion Board (FIPB) last week has paved the way for completion of the deal. The airlines now await approval from the Cabinet Committee on Economic Affairs (CCEA), which oversees foreign investment proposals of more than $200 million, and security clearances of foreign nationals.
Even as AirAsia India prepares to apply for a No Objection Certificate to start domestic operations, Abu Dhabi-based Etihad Airways has invested $379 million in India’s Jet Airways. The outlay gives Etihad a 24-percent share in India’s second largest carrier.
The withdrawal of Kingfisher Airlines’ domestic airport slots and international flying rights by India’s Ministry of Civil Aviation on February 25 could make a phased restart of the carrier even more challenging. Meanwhile, authorities have de-registered 13 of the 37 aircraft parked in India, but airports haven’t allowed lessors to claim their assets until Kingfisher pays pending dues totaling $72 million.
“[Kingfisher has] to give some guarantee [to pay], said Airports Authority of India chairman V.P. Agrawal. “Bank checks worth $21 million…bounced. A legal issue is going on.”
India’s fastest growing and most successful airline–budget carrier IndiGo–has become the first victim of an October ruling by the country’s aircraft acquisition committee governing the number and kind of aircraft imported by airlines to encourage regional connectivity to smaller towns. In November the committee, led by civil aviation minister Ajit Singh, cleared for import only five of the 16 Airbus A320-series aircraft Indigo wanted to acquire.
India lost 9 percent of its airline seat capacity as a result of Kingfisher suspending operations since October 1, 2012, when its 66-aircraft fleet was grounded, according to Dinesh Keskar, Boeing’s senior sales vice president for Asia Pacific and India.
Policy-making paralysis over much-needed reforms and liquidity concerns raised by the grounding of Kingfisher Airlines has deterred investors, vendors, lessors and suppliers from doing business in India’s air transport sector, according to delegates attending last month’s Asia-Pacific Airlines Association Assembly of Presidents in Kuala Lumpur. Association calculations show that average profits among Indian airlines amount to just $1 per passenger.
The Indian government has finally given in to demands to ease restrictions on foreign direct investment (FDI) in the country’s struggling airlines. The unexpected September 14 announcement clears the way for foreign carriers to take up to a 49-percent stake in Indian operators, with the exception of government-owned Air India. However, industry and financial analysts indicated to AIN that they view the policy U-turn cautiously, warning that it won’t necessarily mean salvation for cash-strapped carriers.
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