Kingfisher Airlines optimistic about growth

India's Kingfisher Airlines is looking to lease both wide-body and narrow-body aircraft to meet an unanticipated surge in demand as the domestic economy recovers more quickly than expected, the company's chairman, Vijay Mallya, said on Monday. Mallya also told reporters on the sidelines of the International Air Transport Association's annual meeting in Singapore that the company had revived a plan to sell Global Depository Receipts, taking higher oil prices into calculation. Asked if Kingfisher's current capacity was enough to cater to the projected increase in demand, he said: "Not quite, that is why we are looking for leased capacity.

"Kingfisher at one time had several aircraft that were on order from Airbus for delivery in 2010 and 2011. During the 2008-2009 crisis, I actually postponed the delivery of those aircraft to 2012 and 2013," Mallya said. "So right now we are looking for capacity, but our own new deliveries will start in about 18 months." He said he was looking to lease both narrow-body and wide-body aircraft. "We have been experiencing for the last six months unprecedented load factors, which I have never seen in the last six years," Mallya said. "We are running at mid to high 80 percent on every flight, which is extremely healthy."

According to its website, Kingfisher has 66 aircraft, mostly Airbus jets and ATR turbo-prop variants. It has more than 125 planes on order. Loss-making Kingfisher, India's second-largest airline by market share, has restructured its debt by converting almost INR12 billion rupees (USD$268 million) of loans into equity. Its current debt stands at about INR60 billion rupees. Last month, it reported a net loss of INR10.27 billion rupees in the fiscal year ending March 31, versus a loss of INR16.47 billion rupees the year before. But it had positive EBITDA amounting to INR1.4 billion rupees, the company says. "We reported significantly improved numbers and EBITDA profit for the first time. This is a sign of things to come," Mallya said.

He said the company had also revived a proposal to sell GDRs of USD$250 million - USD$350 million, but gave few details. "We had an excellent roadshow for our GDR in January and early February this year and we presented a compelling business plan." He said the plan assumed crude oil at USD$90 per barrel. "The minute crude oil prices started going up to USD$120 plus per barrel, prospective investors asked us to rework our business plans, which we did."

The flamboyant Mallya, who controls the United Breweries Group, owns a Grand Prix motor racing team and a team in India's cricket league, said Kingfisher's growth should be enhanced as it joins the oneworld airline alliance, which also includes Cathay Pacific, British Airways and Qantas. "The opportunities to leverage this alliance are huge," he said, adding that Kingfisher would become a fully operational member by 2012. "We see this as being a contributor of about 5-6 percent of enhanced revenue to us."

He said Kingfisher was continuing to lobby the government to allow foreign airlines to take stakes in Indian carriers. "Airlines in India must raise capital and the opportunity to raise capital from foreign airlines must not be excluded and that's why we will continue to request the government of India to reconsider its foreign direct investment policy." Kingfisher flies to eight international destinations and to more than 50 towns and cities in India. Its fleet of turboprop aircraft will help it to respond to the pattern of wealth creation in India, Mallya added. "There is a lot of wealth in tier-2 and tier-3 cities that is being created," he said. "It is no longer a situation where wealth in India is restricted to the big metro cities, so it offers a huge amount of opportunity. "Kingfisher is well positioned because it has a large number of ATR aircraft which are ideal to service the emerging demand in tier-2 and tier-3 cities," he said.

Boom in Asia creates a shortage for pilots!

Cathay Pacific Airways Ltd., Qantas Airways Ltd. and Emirates Airline are awaiting deliveries of about 400 planes to capitalize on Asia’s rising prosperity. Finding pilots is the next job.
Boeing Co. expects the region’s carriers to be the biggest buyers of twin-aisle planes as travel grows in China and India, home to a combined 1.1 billion middle-class people. Asia-Pacific airlines will buy about 8,000 planes worth $1.2 trillion over the next 20 years, Airbus SAS said. Airlines worldwide need an average of 49,900 pilots a year from 2010 to 2030 as fleets expand, yet current training capacity is only 47,025, according to the International Civil Aviation Organization in Montreal. That is sparking bidding wars as Emirates offers tax-free salaries and four-bedroom villas for captains, and AirAsia Bhd., the region’s biggest budget airline, gives tuition-free training. “It’s a major issue and will be a big challenge to the industry’s growth,” said Binit Somaia, a Sydney-based analyst for the Centre for Asia Pacific Aviation. “Even if you can find the pilots, you have to pay top dollar for them because they are so scarce.”

China, the world’s fastest-growing major aviation market, likely will account for a third of the region’s orders, Airbus, the world’s biggest aircraft maker, said in February. Its economy will grow 10.5 percent this year, compared with world growth of 4.6 percent, according to International Monetary Fund estimates.
India, with estimated growth of 9.4 percent this year, may overtake China as the world’s fastest-growing major economy as early as 2013, according to Morgan Stanley.
This year, the region’s carriers ordered 133 commercial jets with more than 100 seats, or 23 percent of the global total, according to Ascend Worldwide Ltd., a London-based aviation forecaster and data provider.
“There will be a shortage of pilots, and this is going to last for a while because it takes time to produce a good pilot,” said Elmer Pena, president of the Airline Pilots Association of the Philippines.
Philippine Airlines Inc. canceled flights in July and August and rebooked passengers after losing 27 pilots to higher paying jobs abroad.

The demand in Asia contrasts with the 4,500 U.S. airline pilots on furlough, according to figures compiled by Kit Darby, a retired United Airlines pilot now running an Atlanta-based consulting firm.
That situation shouldn’t last long. The global fleet of cargo and large passenger planes will double to nearly 32,000 by 2028 from 15,750 last year, according to Airbus.
The major U.S. airlines are expected to hire more than 40,000 pilots in the next 12 years, said Louis Smith, president of FltOps.com, which provides career counseling services and sponsors job fairs.
World passenger traffic is expected to increase an average of 4.7 percent a year between 2009 and 2028, according to Airbus.
Emirates is the largest Arab airline with more than 200 planes on order. It aims to recruit 250 pilots this year and double that number in 2011, it said in a statement.
The company, which needs more than $28 billion through 2017 for expansion, sought to recruit in Houston, Madrid and Singapore.
Cathay Pacific, Hong Kong’s biggest carrier, will recruit 1,000 people, including crew, Chief Operating Officer John Slosar said. PT Garuda Indonesia placed a newspaper advertisement last month seeking pilots “fluent in English and of good character.” Jetstar, the budget arm of Qantas, plans to recruit 120 more pilots by next summer.
Singapore Airlines Ltd. and AirAsia, based near Kuala Lumpur, set up their own tuition-free training academies. Singapore Air’s flying college graduates about 150 cadet pilots a year, while AirAsia’s facility trains as many as 500 a year.
Graduates must stay with the budget carrier for five years, AirAsia Chief Executive Officer Tony Fernandes said.
New flight schools also are opening. CAPA is investing at least $125 million to build an aerospace university in India that can train about 300 pilots a year, Somaia said.
The shortage, and hiring by a new crop of budget carriers, also could push wages higher.
“There is a misconception that low-cost airlines pay lower salaries,” said Tony Davis, chief executive officer of budget carrier Tiger Airways Holdings Ltd., part-owned by Singapore Air “We couldn’t do that in a competitive market.”
Basic pay for Singapore Air captains flying twin-aisle Boeing 777s or the Airbus A330s begin at S$9,300 ($6,870) a month, excluding allowances, said P. James, president of the Air Line Pilots Association of Singapore. They also earn a productivity allowance of as much as S$3,800 for flying 70 hours a month.
Emirates offers a starting monthly salary of 34,410 dirhams ($9,370) for captains, according to its website. That excludes benefits such as hourly flying and productivity payments.
Its other perks include a tax-free basic salary, profit sharing, villas for captains and free dry cleaning of uniforms, its website said. Those incentives help attract candidates to an increasingly demanding job, said Barry Jackson, president of the Australian and International Pilots Association, who has been a pilot at Qantas since 1987.
“Young people these days prefer to become doctors or lawyers,” he said. “This sort of career path is becoming less desirable.”

Jordanian B767 makes emergency landing in Poland

A Jordanian Royal Airlines B767 was forced to make emergency landing at the Warsaw airport on Sunday. The flight en-route Sweden - Iraq developed a cockpit windshield crack which forced the Pilot to declare an emergency and land immediately at Poland. This is the second of this kind in a very short interval where a same kind of issue was faced by Qantas Airline's Jumbo last month. All passengers on board both the flights where reported safe with no injuries.  

Series of Qantas Jumbo's being grounded

A Qantas Airlines B747 bound to Melbourne from Los Angles developed a crack on its windscreen, the first officer noticed it during flight. The aircraft landed safely and was grounded for a windscreen replacement before it got back to service
A week before this happened a Qantas A380 was grounded as two of its tyres exploded when it landed at the Sydney airport..