Domestic News - January 2011 Airbus wins record order from IndiGo

India's largest low cost carrier, IndiGo has signed a Memorandum of Understanding for 180 eco-efficient Airbus A320 aircraft of which 150 will be the neo option and 30 will be standard A320s. It is the largest single firm order number for large jets in commercial aviation history, and also makes IndiGo a

launch customer for the A320neo. The airplanes are expected to be delivered between 2016 and 2025. Engine selection will be announced by the airline at a later date.The A320neo, available from 2016, incorporates new more efficient engines and large wing tip devices called Sharklets delivering significant fuel savings of up to 15 percent, which represents savings of over 400,000 USgal of fuel and up to up to 3,600 tonnes of CO2 annually per aircraft. In addition, the A320neo provides a double-digit reduction in NOx emissions and reduced engine noise. “This order for industry leading fuel efficient aircraft will allow IndiGo to continue to offer low fares” said Rahul Bhatia, Group Managing Director of InterGlobe Enterprises and Rakesh Gangwal, co-founders of IndiGo. “Ordering more A320s was the natural choice to meet India’s growing flying needs. The opportunity to reduce costs and to further improve our environmental performance through the A320neo were key to our decision.” IndiGo rises to joint No. 2 with Kingfisher

IndiGo Airline has become the India's No. 2 airline equaling Kingfisher Airlines in December, and Air India-domestic to take the No. 3 spot, according to a report. The report stated that Kingfisher and IndiGo had a market share of 18.6%, the Jet-JetLite combine was ahead with 25.4%. Indigo flew 9.71 lakh passengers in December 2010 compared with

Kingfisher’s 9.72 lakh, adds report. 100,000 flying hours for Eurofighter Typhoon The operational fleet of Eurofighter Typhoons in service since the second half of 2003 achieved the impressive milestone of 100,000 flying hours in January 2011. This total was celebrated during an event held at Eurofighter headquarters in Munich, Germany. At the event were senior representatives from the Eurofighter programme, Eurofighter management agency NETMA alongside senior staff from all six customer nations including those from the export customers Austria and the Kingdom of Saudi Arabia. The 100,000 hours were achieved flying the Typhoons in the bitter cold weather of the Baltic Sea, in the temperate climate of the Tyrrhenian Coast, in the torrid heat of the Arabic Peninsula and over the rough South Atlantic Sea. A range of operational scenarios have tested the Typhoon to its limits and is testament to the reliability, operational readiness and the durability of the platform and systems under operational conditions.

Yearly Industry Newsletter

1 of 43

Rewind 2011 Rewind 2011: Agriculture Newsletter Rewind 2011: Automobile Newsletter Rewind 2011: Aviation Newsletter Rewind 2011: Banking Newsletter Rewind 2011: Hotels & Tourism Newsletter Rewind 2011: Information Technology Newsletter Rewind 2011: Infrastructure Newsletter Rewind 2011: M&A Newsletter Rewind 2011: Metal & Mining Newsletter Rewind 2011: Oil & Gas Newsletter Rewind 2011: Real Estate Newsletter Rewind 2011: Retail Newsletter Rewind 2011: Telecom Newsletter

Tata to set up new aerospace units: report The Tata Group is planning to set up three more units as a part of its aerospace manufacturing initiative in Hyderabad with an investment of Rs10bn, according to a report. The report stated that the chief minister has assured support including speedy allotment of 125 acres of land near the Aerospace Special Economic Zone on the city outskirts.Besides Tata group, other companies such as Mahindra and TVS has keen interest in establishing their defence-related aerospace manufacturing facilities in Hyderabad.These new units will employ about 1,000 persons besides making an investment of about Rs. 10bn, adds report. Air India increases fuel surcharge by up to Rs. 200: report

Air India has increased fuel surcharge by up to Rs. 200 across its domestic sectors, according to a report.The report stated that the airline has raised fuel surcharge by Rs. 100 for travel up to 750 km and Rs. 200 for flights over 750 km. After the hike, the revised fuel surcharge stands at Rs. 2,450 and Rs. 3,300, respectively, adds report.Last

week, Jet Airways and Kingfisher had raised fuel surcharges by Rs. 100 and Rs. 200 on their domestic sectors effective from January 1. BPCL grants 3 months extension to Kingfisher Airlines: report Kingfisher Airlines has got 3 more months for repaying BPCL jet fuel dues, according to a report.The report stated that last month BPCL has decided to file an execution petition in the Bombay High Court but on Kingfisher plea has extended the deadline. Kingfisher Airlines has requested and promised to pay off dues by March 2011, says report.There are reports that Kingfisher owes BPCL's Rs. 2.2bn for fuel dues. AI to lease 40 Airbus, Bombardier planes: report Air India Ltd has sought bids to lease as many as 40 Airbus SAS and Bombardier Inc. aircraft, according to a report. The report stated that the airline wants to lease 10 Airbus A320s, 10 A330s and as many as 20 CRJ-700 planes. Air India has a fleet of 135 planes and is expecting 30 more aircraft deliveries in the next few years, adds report. AirAsia pulls out of Hyderabad airport over increased levies

Yearly Industry Newsletter

2 of 43

International News - January 2011 31 killed at Moscow's Domodedovo airport: report An explosion at Moscow's Domodedovo airport killed around 31 people while injuring over 130 others. The blast occurred in the entrance of the international arrivals section of Domodedovo Airport. Russian Investigative Committee's Transport Investigative Department confirmed that an explosion occurred at Domodedovo Airport's luggage reclaim zone at the international arrivals terminal. Preliminary reports suggested that it might have been a suicide bombing. Boeing 787s resume test flights for certification: report Boeing Co has reportedly said that its delayed 787 aircraft had resumed the test flights required by government regulators before it can make its first customer delivery. The report stated that Boeing restarted 787 test flights a month ago after finding a "fix" for the problem that led to an onboard fire during a flight on Nov. 9. Another two planes would restart certification flights in a week or so, adds report. Abu Dhabi's Etihad eyes Virgin Atlantic: reports Abu Dhabi's Etihad Airways has expressed keen interest in Richard Branson's British airline Virgin Atlantic, according to a report. The report stated that Virgin Atlantic is in the early stages of conducting a full strategic review which could result in an alliance with rival carriers or a sale. There are reports that Deutsche Bank is working with Virgin Atlantic and Virgin Group to assess the current aviation market place and seek growth opportunities for Virgin Atlantic. Air New Zealand plans to acquire up to 14.99% of Virgin Blue: report Air New Zealand Ltd. has reportedly said that it has received approval from the Australian Foreign Investment Bureau to buy up to 14.99% of Virgin Blue Holdings Ltd. The report stated that the company is planning to buy between 10% and 14.99% of Virgin Blue but has no intention of making a full takeover offer for the firm Qantas to resume A380 service to LA Qantas Airways Ltd has reportedly said that it will resume a flight between Australia and Los Angeles on the jumbo Airbus A380 aircraft, starting with a service from Melbourne on Sunday. The airline had in November grounded the A380 fleet and suspended flights on the Los Angeles-Australia routes to monitor the performance of the Rolls-Royce Trent 900 engines on the aircraft, adds report. The report stated that the moves came after a Qantas flight on the A380 aircraft had made an emergency landing in Singapore. easyJet expands fleet with 15 additional Airbus A320 aircraft European based easyJet has signed a contract to buy a further 15 A320 aircraft and to convert an existing order for 20 Airbus A319s into the larger A320 model. The agreement is part of an order book which now totals 242 Airbus A320 Family aircraft, making easyJet one of the world’s largest customers for this type. “We are pleased to announce this agreement with Airbus. It will help deliver easyJet's strategy of continued profitable growth, whilst providing even more flight capacity for our passengers. A central feature of the agreement is the flexibility it gives easyJet to vary the growth rate in its capacity to reflect economic conditions and market opportunities," said Carolyn McCall, easyJet Chief Executive. Airbus launches “Airbus ProSky” Virgin Blue cuts first-half profit guidance: report

Yearly Industry Newsletter

3 of 43

Virgin Blue Group signs 10 year strategic alliance with Skywest Airlines : report

Yearly Industry Newsletter

4 of 43

Domestic News - February 2011 CAG questions AI on 111 aircraft order: report The Comptroller and Auditor General (CAG) has questioned the government's rationale for buying 111 aircraft for national carrier Air India for 40,000 crore in 2006, according to a report.The CAG has reportedly said that they wanted to know the reasons for delay in setting up of a Maintenance, Repair and Overhaul (MRO) facility in India as part of the offset clause in the deal.The report stated that 43 of the 111 planes are from Airbus' stable have been already delivered to Air India. The government and the national carrier have sent their response to the CAG, adds report. Deccan Charters, Taj Air launch new air charter service Powerfly Deccan Charters Ltd - a leading aviation services company of India, Taj Air – the executive charter service of IHCL, and Business Jets India Private Ltd (BJETS) has announced a significant collaboration to launch a new alliance in the air charter industry - called POWERFLY. The collaboration will leverage the synergies of the three brands and their fleets and is poised to become a considerable force. The collaboration includes a Marketing, Maintenance and Operational Support agreement between Deccan Charters and BJETS. The collaboration was announced today in Mumbai in a joint press conference addressed by R K Krishna Kumar – Director, Tata Sons and Vice Chairman, Indian Hotels Company Ltd. and Capt. G R Gopinath, Chairman and Managing Director, Deccan Charters Ltd. Powerfly will commence operations from 14th February 2011, and will accept bookings with immediate effect. Spicejet clarifies report on 2G spectrum Scam Spicejet Ltd. clarified that the news item appearing in a business newspaper on February 04, with headline "2G spectrum scam: Spicejet under CBI scam" is totally false, malicious, motivated, preposterous and per-se defamatory. Further, legal notice has been issued to the newspaper’s Editor, to issue suitable retraction in the matter. Further, as informed and to place on record, the entire transaction of purchase of SpiceJet shares by Maran has been in compliance with all statutory requirements. The funds were raised by borrowing from mutual funds / financial institutions etc against pledge of shares held by Maran in Sun TV Network Ltd. AI needs Rs. 100bn from govt: report Civil Aviation Minister Vayalar Ravi has reportedly said that Air India will require more than Rs. 100bn from the Central Government for survival, according to reports. The reports stated that Vayalar Ravi met with Air India Union and would approach the Finance Minister for the same soon. Vayalar Ravi also reportedly said that the company is planning to review the performance of the Air India top management. Earlier, the Aviation Minister reportedly sought equity infusion of over Rs. 20bn from the Government for financially-troubled Air India. This move was undertaken after Ravi met Finance Minister Pranab Mukherjee to discuss the airline's dwindling fortunes as also issues pertaining to the industry for the coming Budget, adds report. There were also reports that Air India's budget airlines Air India Express would be shifted from Mumbai to Kochi. CCI admits travel agents complaints against airlines Travel Agents Association of India has stated that the case filed by the TAAI in the COMPETITION COMMISSION OF INDIA (CCI) against concerned Airlines for reducing commission to “ZERO” for Travel Agents, has been admitted by CCI as case no. 14/ 2009 and DG (Director General), CCI has also submitted its investigation report and directed all Airlines e.g.: Lufthansa German Airlines, Continental Airlines, KLM Royal Dutch Airlines, Swiss International Airlines, Singapore Airlines, Air Canada, Air France, North West Airlines, Austrian Airlines to submit their comments on its investigation report within 15 days and thereafter appear before the CCI on 3rd March 2011.

Yearly Industry Newsletter

5 of 43

Boeing announces 787 first delivery to AI Boeing announced that Air India will receive the delivery of the first Boeing 787 in the 4th quarter of 2011. This announcement was made at the Aero India show and followed Boeing’s January announcement of the first delivery to Air Nippon Airways in the 3rd quarter of 2011. Boeing’s 20 year outlook of 2010 highlights India’s aviation need of 1150 commercial jets valued at approximately $130 bn. -- a market representing about four percent of Boeing Commercial Airplanes’ worldwide forecast . Keskar said that this forecast has steadily grown over the last decade due to the unprecedented growth in the Indian economy. India’s economy continues to be the strongest in the world with a growth of 8.5 percent annually over the forecast period. Global firm orders for the Boeing 787 at end of 2010 were 847 airplanes from 57 customers endorsing the value and trust customers have in the airplane.

Yearly Industry Newsletter

6 of 43

International News - February 2011 Two Italian Air Force Eurofighter Typhoons land in Bengaluru Two Eurofighter Typhoons of the Italian Air Force arrived safely in Bengaluru to showcase their outstanding operational capabilities at Aero India 2011. The air show will be held at the Air Force Station Yelahanka in Bengaluru between the 9th and 13th of February.This is the first time that the Italian Air Force Typhoons visit India and will thrill the visitors attending the 8th edition of the Indian aerospace exhibition with breathtaking maneuvers and aerobatics of the world’s most advanced multi-role combat aircraft.Eurofighter Typhoon is one of the competitors in the Indian Air Force MMRCA tender and is regarded as the most advanced aircraft in terms of performance and technology. The Typhoon combines high combat effectiveness with low cost of ownership making it the best value for money combat aircraft worldwide. Japan Airlines, American Airlines b

American

olls Royce bags US$2.2bn order from Emirates: report TotalCare long

oss Aviation buys Fresno FBO: report as acquired the assets and the

TA signs MOU with Govt of Singapore

atar Airways set to make its debut in Canada

xis aerospace inks pact with FGUP

AE Systems at Aero India 2011

egin joint sales: report Japan Airlines (JAL) and Airlines (American) has announced the implementation of the next phase of their joint business through joint selling in Japan beginning Feb. 1, 2011, according to a report. The report stated that the two airlines have coordinated most of their Business Class and Economy Class

carrier-filed fares for North America-bound flights originating from Japan effective April 1, 2011.As a result of the two airlines closer coordination, it will now be easier for customers to benefit from carrier-filed discount fares for itineraries using both airlines, adds report. REngine maker Rolls-Royce has bagged US$2.2bn (£1.4bn) term services contract from Emirates, covering Trent engines for 70 Airbus A350XWB aircraft, according to a report.The report stated that the agreement will bring the airline's Rolls-Royce powered fleet of 128 aircraft, in service and on order, under TotalCare arrangements. TotalCare long term service agreements are designed to minimise customer financial risk and enhance operational performance and reliability, allowing operators to concentrate on their core business, adds report. RRoss Aviation has reportedly said that it hlease of the FBO formerly operated by Atlantic Aviation at Fresno Yosemite International Airport (FAT) in Fresno, Calif. The FBO will consolidate into the Ross Aviation’s existing on-field operation, Corporate Aircraft, adds report.The report also stated that with this acquisition, Corporate Aircraft offers more than 250,000 square feet of hangar and 55,000 square feet of office space. IA Q A B

Yearly Industry Newsletter

7 of 43

Domestic News - March 2011 AI COO Gustav Baldauf steps down: reports Air India's Chief Operating Officer Captain Gustav Baldauf has resigned after he was asked to explain his reported remarks about political interference in the airline’s day-to-day affairs, according to a report. The report stated that Baldauf, an Austrian national who was appointed the COO last April, had earlier worked for 25 years in senior capacities in several airlines including Jet Airways and Austrian Airlines.Baldauf had also expressed annoyance at the removal of Capt Pawan Arora as the COO of Air India Express, says report.There are reports that Baldauf was appointed at an annual salary package of Rs. 3 crore with the mandate to implement Air India's turnaround plan. DGCA cracks whip on fake pilots The Directorate-General of Civil Aviation (DGCA) revoked a total of 14 commercial pilot licences (CPL) after discovering that they had submitted fake training records from the Rajasthan State Flying School to procure licences. One of the 14 pilots who lost their licence is the son of a DGCA official. "Following inputs from the anti-corruption bureau which is investigating the case, we had cancelled the licences of eight pilots. Today we cancelled another six CPLs," said director-general of civil aviation Bharat Bhushan. Once a CPL licence is cancelled, the person is no longer a pilot. She/he can approach the court and challenge the DGCA's decision to revoke their licence. The DGCA has identified two more pilots who had submitted forged mark sheets to obtain the Airline Transport Pilot License (ATPL). The Rajasthan Anti-Corruption Bureau is examining other cases of fudged mark sheets and false flying hours. The DGCA has already completed systematic verification of about 1,500 licences in the last three weeks and would soon complete the process for all 4,054 licences issued by it. It has also commenced a special audit for all 40 flying clubs across the country to determine if these schools are competent to certify that a candidate has completed 200 hours of flying before applying for a CPL. Lastly, the regulator has also asked airlines to do some checks on their end. SpiceJet fires 2 pilots for producing fake certificates: report SpiceJet has sacked two pilots - captain Anuj Kumar and first officer (co-pilot) Amit Mundra - for fudging their flying hours to get licence to fly from the DGCA, according to a report. The airline said in a statement that it was committed to provide a safe travel without ever compromising the safety of esteemed customers. The Indian budget carrier reportedly said that following the investigations into the fake flying license issue, SpiceJet has terminated the services of the two pilots Govt mulling proposal to allow foreign carriers in India: Dr. Nasim Zaidi Dr Nasim Zaidi, Secretary, Ministry of Civil Aviation, in his keynote address at the India Aviation Meet organized by Confederation of Indian Industry (CII) today, said that the Ministry of Civil Aviation has received a request from Department of Industrial Policy and Promotion (DIPP) regarding allowing of foreign airlines’ investment in India which is under consideration and a decision on this would be taken soon. Elaborating on the overall contribution of the civil aviation to the GDP, he said that Ministry is launching the satellite accounting system to assess the actual contribution of the sector to the country’s economy. Addressing Industry’s concerns, he said that the Ministry is well aware of the unfavourable fiscal environment affecting the viability of civil Aviation and the Ministry would take up the issue of recent hike in Service Tax with the Finance Ministry. In the same vein, Ministry of Civil Aviation is taking up the issue of high taxes on Aviation Turbine Fuel (ATF) and is in favour of including ATF under Goods and Service Tax (GST). On the

Yearly Industry Newsletter

8 of 43

emission and environment related issues he said that there is a need to evolve a global approach under ICAO rather than following a regional approach which might hurt the aviation sector particularly in developing countries. Milestone Aviation to acquire 5 Sikorsky S-76 helicopters Sikorsky Aircraft Corp. and Milestone Aviation Group Limited jointly announced for the first time the scheduled deliveries of five Sikorsky S-76C++ helicopters to Milestone in the second half of 2011 under a firm order contract signed last December. Milestone, the first global finance company focused exclusively on the helicopter and private jet markets, will offer these aircraft for lease to high-quality operators around the world. Sikorsky is a subsidiary of United Technologies Corp. “The S-76C++ is a great helicopter and a workhorse of the offshore oil and gas industry,” said Richard Santulli, chairman of Milestone. “We believe there will be tremendous demand for these machines from operators all over the world. We are thrilled to work with Sikorsky to deliver their product to market.” Spicejet clarifies reports on safety issues Spicejet Ltd. said that various News Programs aired on News Channel on March 24, 2011 regarding safety issued raised against the Company. The Company clarify that the aforesaid news item/ articles/ publications are factually incorrect and based on conjectures. The Company would like to reiterate that SpiceJet is a Safe and reliable airline where safety is of utmost importance. The selection criteria adopted by the Company with regard to pilots etc. strictly adhere to Industry practices.The Company always gives highest priority to safety and security of the passengers and any inference or remote suggestion otherwise is completely untrue and without any basis. Rajat Gupta resigns as Director of American Airlines Cabinet likely to be move on setting up a Civil Aviation Authority: report 13 non operational airports to be operationalised SpiceJet plans to expand domestic and international networks : report Air India pilot J K Verma arrested for fake marksheet: report

Yearly Industry Newsletter

9 of 43

International News - March 2011 IATA downgrades airline industry outlook The International Air Transport Association (IATA) downgraded its airline industry outlook for 2011 to US$8.6 bn from the US$9.1 bn it estimated in December 2010. This is a 46% less fall in net profits compared to the $16 bn (revised from $15.1 bn) earned by the industry in 2010. On expected industry revenues of US$594 bn, the US$8.6 bn 2011 profit equates to a net profit margin of 1.4%. “Political unrest in the Middle East has sent oil over $100 per barrel. That is significantly higher than the $84 per barrel that the assumption in December. At the same time the global economy is now forecast to grow by 3.1% this year—a full 0.5 percentage point better than everybody thought just three months ago. But stronger revenues will provide only a partial offset to higher costs. Profits will be cut in half compared to last year and margins are a pathetic 1.4%,” said Giovanni Bisignani, IATA’s Director General and CEO. Boeing inks US$10bn deals with 2 Chinese airlines: report Boeing has bagged orders worth US$10bn from two airlines in China, according to a report.The report stated that Hong Kong Airlines and Air China have agreed to buy Boeing aircrafts including the 787 Dreamliner. The deals were sealed at the Asian Aerospace conference in Hong Kong, says report. IATA praises Dilma Rousseff’s strategic focus on aviation The International Air Transport Association (IATA) praised President Dilma Rousseff’s strategic focus on aviation and urged a quick follow-up with critical reforms to improve the industry’s competitiveness. Preparations to host the FIFA World Cup and the Olympics make urgent progress necessary. “President Rousseff recognized the power of air transport to drive long-term gains in the quality of life in Brazil in her inauguration speech. Her intention to create a ministry-level Civil Aviation Secretariat is an opportunity to achieve change. IATA is eager to use our global expertise to play a collaborative role in delivering on the President’s expectations with a strategic plan focused on competitiveness,” said Giovanni Bisignani, IATA’s Director General and CEO. Bisignani made his remarks in a speech at the British Chamber of Commerce in Sao Paulo, with Government nominations for key aviation posts imminent. 16 people killed after Cargo plane crashes in Congo Republic: report Lufthansa increases flights from Mumbai Qantas Airways to lift international surcharge: report Ryanair diverts flights from Trapani airport in Sicily: report

Yearly Industry Newsletter

10 of 43

Domestic News - April 2011 Aviation Ministry to seek Govt nod for hiving off AI’s ground-handling biz: report The civil aviation ministry has reportedly said that it is preparing cabinet note seeking government approval to hive off aircraft maintenance and ground-handling services of the airline into separate business units.The report stated that this will help separate the balance sheets of the core and non-core businesses of the airlineAir India had asked for the government's approval to operationalise SBUs last year in December too, while asking for a 12bn equity infusion into the airline, says report. SC slaps notice on Govt on airport ground handling policy The Supreme Court has sought the Union government's stand on a plea challenging its ground handling policy at metro and some other airports, according to a report.The report stated that the Issuing notices to the Civil Aviation Ministry, Directorate General of Civil Aviation and others on a petition by private airlines federation, a bench of justices R V Raveendran and A K Patnaik sought their response within two weeks.There are reports that the matter should be adjourned for further hearing on April 25. The bench issued notices on the petition challenging the Delhi high court's March 4 ruling, says report. Kingfisher says no aircraft landed at Goa airport Following a spate of erroneous news reports around flight operations into and out of Goa Airport, Kingfisher Airlines has clarified that no aircraft landed at Goa airport. As a matter of fact, Kingfisher Airlines had adjusted the schedule so that all its arrivals occur well before 3pm and hence were scheduled to even depart prior to 3pm. In this particular case referred to in several news reports, the three flights were delayed due to ATC/Airport congestion and departed by 3:30pm.The airline also clarified that the NOTAM has been in force at Goa Airport, NO AIRCRAFT of ours has ever landed at Goa Airport during the period when PAPI or ILS (Glide Scope Localiser) was not available. We categorically deny any suggestion to this effect. On April 11, 2011, 3 of the aircraft that landed at Goa Airport landed well before 3pm which is the time at which the NOTAM comes into force. Thomas Cook announc

(India) Limited has announced a

AL Airways pledges 38.43% of shares in Spicejet dged 38.43% of its

es strategic partnership with IITTM Thomas Cookstrategic partnership with Indian Institute of Tourism and Travel Management. A two year Post Graduate Diploma in Management in International Business focusing on tourism is being planned. The Programme is approved by AICTE (All India Council for Technical Education). The program has been developed with careful support and guidance of a Training Centre – "Centre of Learning", an initiative of Thomas Cook (India) Limited for imparting

training and developing key talent pools for the travel industry. The program offers dual specializations for learners to enable them to acquire the right skill set with ample flexibility to adapt to employing organization’s needs. The teaching methods will include case based learning and exposure to international business environment. Thomas Cook India will facilitate practical exposure and training. KSpiceJet Ltd has said that KAL Airways Pvt. Ltd has pleholding in the low-fare carrier. KAL Airways has pledged 31.25 million of its shares, which accounts for 14.84% of the total outstanding share capital in the company.

Yearly Industry Newsletter

11 of 43

Air traffic hit as AI pilots go on strike left high and dry in the heat of

C quashes ADF at Mumbai airport the levy of airport development fee

ndiGo selects Pratt & Whitney engines for Airbus A320 Order power

he PurePower engine's benefits will allow us to make dramatic

adia group plans to appoint expat CEO for GoAir: report

Thousands of domestic air passengers werethe summer after pilots belonging to Air India went on an indefinite stir, demanding higher pay. The Delhi High Court came down heavily on the agitating Air India pilots. A bench comprising Chief Justice Deepak Misra and Justice Sanjeev Khanna issued notices to the pilots on the plea of Air India Management seeking contempt proceedings against the pilots. The High Court directed the 800 protesting Air India pilots to resume their work immediately. But, the pilots refused to budge, leading to the cancellation of dozens of flights over the past three days. The pilots mostly belong to erstwhile Indian Airlines that was merged with Air India. They are part of the Indian Commercial Pilots Association (ICPA). The ICPA, which was de-recognised and had its offices sealed, is demanding a higher fixed component in the salary package, a CBI probe into the alleged mismanagement and removal of Air India CMD Arvind Jadhav SThe Supreme Court (SC) shot down (ADF) charged by a private developer on passengers at the Mumbai airport. With this, passengers will not have to pay an additional amount for landing or taking off at the Mumbai airports. The apex court's ruling is likely to lower domestic air ticket prices as well.A bench comprising justice Cyriac Joseph and justice A.K. Patnaik set aside the Delhi High Court’s order, which had upheld levying of ADF. The Supreme Court passed the order on a petition filed by the NGO Consumer Online Foundation, claiming that the ADF was illegal as it was not approved by the Airports Economic Regulatory Authority of India.Passengers departing from Delhi airport are paying ADF of Rs. 200 for domestic flights and Rs. 1,300 for international flights. Passengers at the Mumbai airport are charged Rs. 100 for domestic flights and Rs. 600 for international flights. GMR Infra operates the New Delhi airport and GVK operates the Mumbai airport. The Delhi and Mumbai airports are BOT projects and GMR and GVK are supposed to hand over the two airports to the Government after 30 years. In a bid to compensate the private developers for their investments in the two airports, the AAI had allotted them land to monetise. IIndiGo has selected Pratt & Whitney PurePower PW1100G engines toits fleet of 150 new Airbus A320neo family aircraft. The decision represents 300 firm PW1100G engines with options for additional engines. In addition, IndiGo has also chosen Pratt & Whitney to provide maintenance for these PurePower engines. Pratt & Whitney is a division of United Technologies Corp. (NYSE: UTX) "Our selection underscores the confidence in the Pratt & Whitney PurePower engine and is another important milestone in IndiGo's history, " said Rakesh Gangwal and Rahul Bhatia, founders of IndiGo. "At IndiGo, we are committed to maintain low fares while reducing our impact on the environment through the use of green technology such as these PurePower engines." "Timprovements in environmental performance with reduced emissions and significant savings in fuel consumption," said IndiGo President Aditya Ghosh. "We are very pleased to extend these benefits to our customers, as they select IndiGo as India's greenest carrier." W

Yearly Industry Newsletter

12 of 43

International News - April 2011 IATA calls on US to reinforce competitiveness of air transport industry The International Air Transport Association (IATA) called on the United States (US) government to reinforce the competitiveness of the US air transport industry with strategic long-term thinking. In cooperation with the industry, IATA urged the US to accelerate NextGen implementation, renew its focus on liberalization, revise proposals for passenger rights legislation and address the rising cost of security. “Aviation ties the US together, connects it to the world, supports 11 million US jobs and drives $1.2 trillion in US economic activity. But aviation does not even rank among the top White House strategic priorities. The US aviation policy agenda is dominated by short-sighted half-measures that focus on micro-management. We must move forward with a bigger vision with the courage to change,” said Giovanni Bisignani, IATA’s Director General and CEO. Bisignani made his remarks to the Wings Club in New York City. Eurofighter Typhoon adds more air-to-ground capabilities The Eurofighter’s air-to-ground capabilities were further improved last week when partner company Cassidian Spain achieved the first EGBU-16 precision guided munition avionic release. This success comes immediately after the first successful Paveway IV release carried out during February in the UK. These trials saw both bomb types being successfully released from Eurofighter aircraft and focused on the functional integration into the weapon system. The EGBU-16 is the selected dual mode precision guided munition for Germany, Spain and Italy where as the Paveway IV precision guided bomb is the choice for the UK. Included in the broad-ranging Phase 1 Enhancement (P1E) programme, both weapons improve the all weather precision attack capability on the Typhoon. Bahrain based investment bank to lease aircraft to Emirates: report Bahrain based investment bank has acquired a Boeing 777-200ER airliner from Emirates Airlines, according to a report.The report stated that according to the agreement, the aircraft fitted with Rolls Royce Trent 8900 engines, will be leased back to Emirates for a fixed six year-term.The lease agreement will be managed by Geneva based Novus Aviation Services, CMHCMH's partner in the transaction and a specialist in aircraft sourcing, trading, leasing and other related services, says report. UAE signs MOU with Vietnam Govt: report Singapore Airlines and SilkAir offers special summer airfare to Singapore FAA to issue emergency directive for Boeing 737s: report

Yearly Industry Newsletter

13 of 43

Domestic News - May 2011 Aviation infra needs US$30bn investments by 2025: Zaidi Investments worth 30 billion dollars (about Rs. 135,000) are required in the next 15 years as Indian aviation industry expands to keep up with the booming passenger and cargo traffic, aviation secretary Nasim Zaidi said.“We must have a long-term planning matched with a vibrant regulatory framework as Indian aviation has all the necessary ingredients to grow exponentially,” he said while inaugurating ASSOCHAM’s Civil Aviation centenary conference on Indian civil aviation. Zaidi said 12 greenfield airports are currently being developed as the country’s unique geographical position offers an opportunity to become a global hub for airlines. A total of 142 million passengers checked in and out of airports across the country during 2010-11, marking a growth of 15 per cent over the previous year.State aviation secretaries will soon meet to provide inputs for toning up infrastructure. The industry also needs foreign investments to set up training institutes in various areas – especially to train air traffic controllers, said Zaidi. MIAL asks Kingfisher to pay dues for Rs1.05bn: report Mumbai International Airport Limited (MIAL ) has asked Kingfisher Airlines that it will put it on a cash and carry basis if it does not clear its Rs. 1.05bn dues by May 25, according to a report.The report stated that MIAL would withdraw its credit facility to Kingfisher effective 14 May, which would require the airline to pay for the airport’s services on a cash-and-carry basis.Kingfisher Airlines has already run into payment issues with oil companies and the Airports Authority of India, says report. Jet Airways asked to pay Rs. 4.78bn to Sahara India The Bombay High Court ruled that Jet Airways India Ltd. defaulted on payment obligations to Sahara India after buying the rival in 2007. According to the court, Jet Airways will have to shell out Rs. 4.78bn plus 9% interest per annum to Sahara India.The court also rejected Sahara's petition claiming Rs. 20bn as the total consideration from Jet Airways for the deal, instead of the renegotiated Rs. 14.5bn. Jet Airways had made an upfront payment of Rs. 9bn to Sahara in 2007 and has deposited another Rs. 2.75bn with the court in installments, M. Shivkumar, Senior Vice President - Finance, Jet Airways was quoted as saying. He also said that Jet Airways will pay the remaining Rs. 2.03bn to Sahara India within two weeks. PM says AI is passing through "difficult phase" Prime Minister Manmohan Singh has reportedly said that Air India is passing through a "difficult phase", as a result of global recession on and high cost of operation.PM also reportedly praised public sector helicopter service Pawan Hans, which has been in the news for the wrong reasons due to a spate of crashes recently. PM also lauded some achievements of his government in the field of civil aviation like completion of Phase-I work of Indira Gandhi International Airport, says report. Airbus to increase to A320 aircarft production to 42 per month in Q4 2012 Airbus will increase the production rate of its popular A320 Family of eco-efficient single-aisle aircraft to 42 aircraft per month in the fourth quarter of 2012. Currently Airbus produces 36 A320 Family aircraft each month, a production rate that will steadily rise to 38 in August 2011 and to 40 in the first quarter of 2012. Currently the production rate for Airbus’ long-range A330 Family is 8.5 per month, increasing to nine in early 2012 and ten in the second quarter of 2013. “The low operating costs and high dispatch reliability offered by the A320 Family make it the best seller in its market” said Tom Williams,

Yearly Industry Newsletter

14 of 43

Executive Vice President Programmes. “With a backlog of over 2,300 A320 Family aircraft to deliver, we need to increase production to accommodate continuing strong customer demand for these new eco-efficient aircraft”. GoAir plans US$150mn IPO: reports

GoAir is planning to raise us$150 m through a initial public offer to fund its operational expenses,according to a report. The report stated that the airline has hired Bank of America Merrill Lynch and Edelweiss Capital to manage the offering. The airline will file for the share sale shortly, says report.

Yearly Industry Newsletter

15 of 43

International News - May 2011 Qatar Airways to acquire 33% stake in European air cargo Co: reports

Qatar Airways is planning to acquire a 33% stake in European air cargo company Cargolux, according to a report. The report stated that the deal will be expected to sign in the next few weeks. Qatar Airways last month signed a US$1.3 bn contract with US planemaker Boeing to buy five Boeing 777 planes to add to its existing 97-plane fleet, says report.

European air traffic hit by Iceland volcano Air traffic across Europe was partially hit as the plume of smoke from the volcanic eruption in Iceland headed towards the UK. The ash cloud also curtailed US President Barack Obama's visit to the UK. Ash particles from the Grimsvoetn volcano had been scattered across much of Iceland, forcing the country to close its airspace on May 22. But winds shifted and began pushing the ash to the south, allowing the island nation to reopen all four airports. Greenland, the only other place where airspace has been shut due to the ash, extended the closure of some airspace. Air traffic controllers in Brussels said they did not expect any further airspace closures due to the ash. The eruption began around 6 p.m. on May 21 about 220 kilometers southeast of Reykjavik. The eruption of Grimsvoetn has raised concerns over a repeat of last year's travel chaos sparked by another Icelandic volcano which led to the biggest shutdown of European airspace since World War II. During last year's eruption of the neighbouring Eyjafjoell volcano, more than 100,000 flights were cancelled and eight million passengers stranded, dealing a major blow to the airline industry, particularly in Europe. The International Air Transport Association estimated the loss to airlines at US$1.7bn. British Airways plans to increase flights to Brazil: report British Airways is planning to increasing services to Brazil by doubling its weekly frequency to Rio de Janeiro from three to six flights, according to a report.The report stated that Flights to Rio de Janeiro will now depart Heathrow for Rio every day, except Mondays. The flight will continue to be served by a three class B777, enabling customers to choose from World Traveller (economy), World Traveller Plus (premier economy) and the airline's fully flat beds in Club World (business class), says report. GE Capital Aviation delivers new Airbus A320 to Vueling Airlines GE Capital Aviation Services Limited (GECAS), the commercial aircraft leasing and financing unit of GE, announced delivery of a new Airbus A320 aircraft leased to Vueling Airlines. The aircraft comes from GECAS’ existing order book with Airbus. Spanish low-cost carrier Vueling Airlines operates a fleet of 46 aircraft to more than 50 destinations. With this delivery, GECAS leases a total of three aircraft to Vueling. Air Arabia’s exclusive summer package takes you to KENYA British Airways to bid forPortugal's TAP: report Deer Jet receives first Airbus corporate jet Emirates Group profit hits AED 5.4 bn in 2010-11

Yearly Industry Newsletter

16 of 43

Domestic News - June 2011 Boeing, Aeroflot announce order for eight 777s Boeing and Aeroflot Russian Airlines announced an order at the Paris Air Show for eight Boeing 777-300ERs (extended range) jetliners. "The Boeing 777 will strengthen our long-haul capabilities," said Vitaly Saveliev, director general of Aeroflot Russian Airlines. "These airplanes will play a critical role in our network expansion strategy, particularly the international growth opportunities we expect from our joint businesses with SkyTeam partners when servicing the Sochi 2014 Olympic Games and the 2018 Football World Cup.""Aeroflot is expanding the strategic capabilities of its long-haul fleet," said Jim Albaugh, president and CEO of Boeing Commercial Airplanes. "We're very grateful for the confidence Aeroflot has placed in Boeing -- and in the 777." The Boeing 777 is the world's most successful twin-engine, long-haul airplane, distinguished by its fuel-efficiency, spacious cabin interior, range capability, commonality with the 767 and the 787, and its reliability. Featuring wider seats, wider aisles, more headroom and more seating, the Boeing 777 Signature Interior is preferred by passengers. PM to ask FM to take expeditious decisions for AI revamp: report Prime Minister Manmohan Singh has reportedly said that it would ask finance minister Pranab Mukherjee to take "expeditious decisions" to revamp the Air India. The report stated that Air India expects the third tranche of Rs12bn equity in July even as it plans to operationalise two subsidiaries on MRO and ground handling. The plan would be prepared on how much equity infusion would be required by the national carrier to make it self-sustaining, says report. Air India head Arvind Jadhav also reportedly said that it would find it difficult to pay salaries to his employees. IndiGo to buy 180 Airbus planes for US$15.6bn IndiGo reportedly sealed the deal for 180 Airbus aircraftincluding 150 Airbus A-320 New Engine Option (NEO) aircraft on Wednesday. Thedeal is valued at about $ 15.6bn. According to reports, the premium is charged as the NEOpromises 15% fuel burn savings among other benefits such as noisereduction and lower maintenance and operating costs. The delivery of the newaircraft is expected to begin in 2016. GoAir orders 72 Airbus A320 aircraft GoAir, the ‘fly smart’ low-fare domestic airline today announced that it has placed anorder for additional 72 aircraft worth Rs. 32,400 crore or US$ 7.2 billion. GoAir’stotal order with Airbus is now 92 aircraft worth Rs. 43,200 crore or US$ 9.6billion. The airline previously placed an order of 20 Airbus A320s. GoAir currently operates 10 aircraft with an average age of 2 years which makesit the youngest fleet in India.Thecompany will take delivery of its additional aircraft from its previous orderover the next 24 months. Deccan 360 in fire fighting mode… to raise Rs. 2bn Deccan 360 is not taking orders, as it claims it is re-aligning its services. The company is re-engineering their services to serve the customers better. It has not been taking orders for the past couple of weeks and have been told not to book till further orders, reports stated. The operation was suspended because of a system upgrade for two weeks in May due to certain glitches. It had to be realigned with business processes, and now the company is back in action, added reports. Spicejet hits air pocket on Maran imbroglio Shares of Spicejet Ltd. took a tumble on June 2 amid reports that a Public Interest Litigation (PIL) has been filed against Union Textiles Minister Dayanidhi Maran for his alleged role in awarding of licences to telecom operator Aircel. He is also alleged to have been a beneficiary of the Aircel stake sale to Maxis Communications. Spicejet Ltd. is owned and run by

Yearly Industry Newsletter

17 of 43

Kalanithi Maran, who is a brother of Dayanidhi Maran. The Maran brothers also own and operate media conglomerate Sun TV Network Ltd., whose stock is also down sharply. Jet, GoAir to place US$6.5bn Airbus orders at Paris show: report Jet Airways and GoAir will reportedly place aircraft orders worth US$6.5bn with Airbus SAS at the Paris Air Show later this month. According to reports, the aircraft orders will be a mix of narrow-body A320 type for short-haul routes and wide-body aircraft for long-distance flying. GoAir will place a minimum order for 50 A320s worth US$4bn, while Jet Airways will buy 10 Airbus A330s worth US$2.5bn for its international plans. The average cost of single-aisle A320 type is US$80mn and that of wide-body A330 type is US$250mn, adds report. Cox & Kings Q4 cons net profit rises 10% Cox & Kings Ltd has posted financial results for the year ended March 31, 2011. The Board of Directors has recommended a dividend of Re. 1 per share subject to approval of the shareholders. The Consolidated Income from operations for FY11 rose by 24% to Rs. 4.96bn, as against Rs. 3.99bn posted in the last fiscal year (FY10). EBITDA for FY11 rose by 23% to Rs.2.30bn as against Rs.1.86bn posted in the last fiscal year (FY10). Consolidated PAT (after excluding effect of exceptional gain) for the year ended March 31, 2011, grew by 13% to Rs. 120.30 crore as compared to Rs. 1.06bn in the corresponding period of last fiscal year (FY10). DIAL advises Airlines not to charge ADF at IGI Airport

Yearly Industry Newsletter

18 of 43

International News - June 2011 Airline Industry 2011 profit o

port Association

atural disasters in Japan, unrest in the

ustralian air traffic disrupted by volcanic ash: report go, continues to

oyal Australian Air Force receives first Airbus Military A330 MRTT s

e aircraft, which had left Madrid on 27th May, was ferried to Amberley

olls-Royce inks US$360mn pact with Etihad Airways d an agreement

aircraft per year.

utlook slashed to US$4bn: IATA The International Air Trans(IATA) further downgraded its 2011 airline industry profit forecast to $4 bn. This would be a 54% fall compared with the $8.6 bn profit forecast in March and a 78% drop compared with the $18 bn net profit (revised from $16 bn) recorded in 2010. On expected revenues of $598 bn, a $4 bn profit equates to a 0.7% margin. “N

Middle East and North Africa, plus the sharp rise in oil prices have slashed industry profit expectations to $4 billion this year. That we are making any money at all in a year with this combination of unprecedented shocks is a result of a very fragile balance. The efficiency gains of the last decade and the strengthening global economic environment are balancing the high price of fuel. But with a dismal 0.7% margin, there is little buffer left against further shocks,” said Giovanni Bisignani, IATA’s Director General and CEO. AChile’s Puyehue volcano which erupted more than a week acreate havoc. The ash cloud has drifted across southern parts of Australia disrupting the flights. Many are stranded, as dozens of flights are delayed or cancelled because of the ash cloud, which is heading over Adelaide and Tasmania. Strong winds have drifted the ashes from the volcano more than half way around the world, across the Pacific into Australian and New Zealand airspace.According to media reports, National airlines Qantas has cancelled all the services to and from Tasmania and New Zealand for the rest of the day this morning while its Adelaide services remain grounded because of the ash cloud. Angeline Prasad, the Bureau of Meteorology forecaster, was quoted as saying, " the ash cloud was moving from west to east, however winds over the mainland were blowing parts of the plume westerly over Adelaide."He further added that the ash was diffusing it was difficult to say when it would cease to be a hazard for flights. RThe first Airbus Military A330 MRTT new generation tanker/transport haformally been delivered to, and accepted by the Australian Defence Materiel Organisation (DMO) at the Royal Australian Air Force (RAAF) base Amberley (Queensland, Australia) on 1st June 2011 at a ceremony attended by DMO, RAAF, Qantas and Airbus Military representatives. Thwhere it arrived on Monday 30th May at 15h00 local time. On its ferry flight, the A330 MRTT was flown by Airbus Military and RAAF crews, and transited via McCarran (Nevada) and Hickam (Hawaii) in the USA. RRolls-Royce, the global power systems company, has reachewith Etihad Airways, the national airline of the United Arab Emirates, to provide long-term engine services and performance enhancement kits worth a total of $360mn.The Abu Dhabi-based airline will receive TotalCare services for Trent 700 engines that power four Airbus A330 aircraft. It will also extend an existing contract covering the same engines that power 20 more of its A330 fleet.In addition, the airline will introduce Enhanced Performance (EP) kits on 30 of its Trent 700s, which will increase their fuel efficiency by more than one per cent per engine and reduce CO2 emissions by 800 tonnes per

Yearly Industry Newsletter

19 of 43

Singapore Airlines to acquire 15 more A330s ingapore Airlines (SIA) has finalised an agreement with Airbus to acquire 15

fleet of 19 A330-300s at

for new planes over 20 years

rocessed at Australian High Commission ew Delhi

Smore A330-300s. The aircraft will join an existingthe carrier, flying from Singapore to destinations across the Asia-Pacific region and to the Middle East. As with the carrier's existing A330 fleet, the new aircraft will be powered by Rolls-Royce Trent 700 engines. "We are extremely pleased that Singapore Airlines will acquire more A330s," said John Leahy, Chief Operating Officer, Customers, Airbus. "The news underscores the position of the A330 as the most popular aircraft in its class, offering levels of comfort, efficiency and reliability that continue to make it a winner with airlines worldwide." Boeing projects US$4 Tn market Korean Air to acquire up to 30 Bombardier CSeries aircraft AirAsia orders 200 A320neo aircraft 100,000th visitor visa for the year pN

Yearly Industry Newsletter

20 of 43

Domestic News - July 2011 India's new plane market to touch US$150bn by 2030: Boeing Boeing Company has Forecasts a US$150bn market for 1320 new passenger planes in India over the next 20 years as the economy aims for double digit growth. Globally, Boeing forecasts US$4trillion market for new aircraft over the next 20 years with a significant increase in deliveries. The company sees a market for 33,500 new passenger airplanes and freighters between 2011 and 2030. Boeing has recently announced that it will boost production to a record 42 737s per month by the first half of 2014. Boeing India President Dinesh Keskar said, "The economic and air-traffic growth will in turn stimulate demand for a variety of aircraft types.In 2011, the economy continues to do well.Indian air carriers are becoming profitable and we expect the GDP to maintain its upward trend in the long term." India and US to sign bilateral aviation safety pact Dr. Nasim Zaidi, Secretary, Ministry of Civil Aviation launched “India Aviation-2012”, the 3rd international Exhibition and Conference on Civil Aviation here today. The event will be held at Begumpet Airport from 14-18th March, 2012. Addressing on the occasion, Dr. Zaidi said that it would be necessary to redefine the parameters of regulation in order to assure travelers the guarantee of safety. The ministry is considering restructuring the DGCA into a Civil Aviation Authority (CAA). In order to prevent repetitive accidents, an Independent Civil Aviation Accident Investigation Committee has been set up within oversight of Ministry of Civil Aviation to coordinate and oversee the investigation into accidents and also effective follow up of compliance of recommendations. Steps are under way to set up a full-fledged Independent Accident Investigation Board. He announced that a land mark Bilateral Aviation Safety Agreement has been approved by the Cabinet and will be signed with USA, during the visit of Ms. Hilary Clinton, US Secretary of State. The proposed agreement will open up huge market for export of aeronautical products manufactured in the country in USA and other regions of the world. This will open up huge potential for investment. Mangalore crash victims to get Rs. 7.5mn compensation The families of victims of the Air India Express crash in Mangalore last year are entitled to a minimum compensation of Rs. 75 lakh each, according to a report. The report stated that the Justice PR Ramachandran Menon passed the order while allowing a petition filed by Abdul Salam and Ramla, parents of 24-year-old B Mohammed Rafi, who was killed in the crash. 158 passengers and crew on board the Air India aircraft from Dubai had perished in the worst air disaster in the last decade, says report. AI plans to raise Rs. 37.45bn for Boeing 787 buys: report Air India is planning to raise a fresh loan of $832 mn (Rs 37.45bn) to fund the purchase of Boeing 787 planes, according to a report.The report stated that the first of these fuel-efficient planes is due for delivery in October and Air India is the plane's second customer after ANA of Japan. Air India has placed an order of 27 Boeing 787 Dreamliners and expects to receive seven planes of this type by March 2012, says report. Cox & Kings to buy UK's Holidaybreak for 312 mn pounds Cox & Kings will acquire UK-based Holidaybreak Plc for ~312 million pounds. The boards of Cox & Kings and Holidaybreak have cleared the deal. The acquisition would be done through Cox & Kings'wholly-owned subsidiary Prometheon Holdings. Holidaybreak shareholders would get 432.1 pence in cash per share.

Yearly Industry Newsletter

21 of 43

International News - July 2011 Boeing 787 Dreamliner lands at Delhi Airport Delhi International Airport (P) Ltd., (DIAL) today welcomed the Boeing 787 Dreamliner at IGIA with a water cannon salute. The aircraft will be stationed here till the morning of 15th July,2011. Commenting on the occasion, I. Prabhakara Rao, CEO,DIAL said, “ We welcome this new state of the art aircraft, and eagerly await the commencement of its commercial operations in Indian colours. We have positioned our Terminal 3 at IGIA as the new hub for India, and these aircraft when commercially operational, will enable the commencement of more non-stop destinations out of Delhi. Non-Stop destinations such as San Francisco, Atlanta, Vancouver, Melbourne, Auckland, Honolulu can surely be within reach, right here from Terminal 3. It will be a win-win situation for the airlines who will find the routes profitable, and also for air travelers who will have more convenient options for flying long haul out of Delhi Air Arabia announces introduction of new flight destination in Saudi Arabia Air Arabia, the first and largest low-cost carrier (LCC) in the Middle East and North Africa – connecting Sharjah to 13 destinations in India - announced the introduction of a new flight destination in Saudi Arabia, from the carrier’s primary hub in Sharjah, UAE. With this introduction Air Arabia now connects you from - Ahmedabad, Bangalore, Calicut, Chennai, Coimbatore, Delhi, Goa, Hyderabad, Jaipur, Kochi, Mumbai, Nagpur and Thiruvananthapuram – to Gassim, Saudi Arabia. Beginning July 15, 2011, Air Arabia will offer 4-weekly flights to Gassim, making it easier and more convenient for passengers in India to visit friends and family located in Saudi Arabia. On Mondays, Wednesday, Fridays and Sundays flights will depart Sharjah International Airport at 13:20 arriving at Gassim Airport (ELQ) at 14:20. Return flights will depart Gassim at 15:00 arriving Sharjah at 18:00 (local time). American Airlines orders 460 new planes from Boeing, Airbus American Airlines said that it would purchase 460 new single-aisle planes. The new order comprises 200 Boeing 737s and 260 Airbus A320s. The order is touted to be the largest in the industry's history and represents a shift for American Airlines, which has for decades bought only Boeing planes. The deal, valued at US$38.5bn, is a significant outlay for the world's third-biggest carrier. The company's stock is down about 80% in the past five years due to poor performance. It had a loss of US$250mn in the second quarter. American Airlines said it is hopeful the reduction in fuel costs will have a positive impact on consumer’s wallets in the future, but didn't say as to whether add-on fees will be dropped. Dubai airport records 8.9% rise in passenger traffic in H1: report Dubai International Airport has recorded an 8.9 per cent increase in passenger traffic in the first half of this year, according to a report. The report stated that the total of 24.6 mn passengers passed through the airport from January to June compared to 22.6 mn in the same period last year. In June, Dubai International Airport handled a total of 4.07 million passengers, up 10.4 per cent from the 3.68 million in June 2010, says report. Virgin Atlantic introduces exciting offer for students traveling to UK and US Virgin Atlantic makes this summer even more special for students travelling to the UK and US for academic pursuits with its exciting new offer. Students can now carry up to 46 kg of luggage to the UK and US and one lucky flyer can also win a holiday to London for his/her parents or two friends.

Yearly Industry Newsletter

22 of 43

The holiday package for one lucky student includes two complimentary return air ticketsfrom Delhi to London on Virgin Atlantic as well as three nights hotel accommodation in London and three tickets each to city’s major tourist land marks including The London Eye, Madame Tussaud’s, The Tower of London, Ripley’s Believe It or Not, Hop On Hop Off tours etc. Virgin Atlantic has created a partnership with “London & Partners”, London’s Official Promotional Agency. The offer is valid from July 16th tillOctober 31st, 2011. TripAdvisor touches 50MM reviews and opinions milestone Tiger Airways execs in talks with safety regulators : report China plans to invest $232 bn in aviation industry : report

Yearly Industry Newsletter

23 of 43

Domestic News - August 2011 Air India...Arvind Jadhav out, Rohit Nandan in Rohit Nandan, a Civil Aviation Ministry official will reportedly takeover as the head of Air India, replacing CMD, Arvind Jadhav. Reports quoted sources as saying that Jadhav’s services are being terminated and Nandan is being appointed CMD temporarily. A proposal for a joint management committee was dropped at the last minute to avoid duplication of command, reports quoted a source as saying. According to reports, Nandan who is expected to take over on Friday, is an Indian Administrative Service officer belonging to the 1982 batch. GoM wants oil companies to start providing ATF to AI on credit: report The Group of Ministers (GoM) on Air India has asked the oil marketing companies to start providing Aviation Turbine Fuel (ATF) to the carrier on credit, according to a report. The report stated that the group under the chairmanship of Finance Minister Pranab Mukherjee, is likely to finalise the financial restructuring and turnaround plan by next month. Civil Aviation Minister Vayalar Ravi has reportedly said that Petroleum Ministry will ask the State-run oil marketing companies to immediately switch AI from cash-and carry to credit system for two to three months. SpiceJet opens bookings for Q-400 operations SpiceJet has announced the commencement of its much-anticipated Q-400 operations by opening bookings for the first phase. In this phase, SpiceJet will connect Hyderabad to seven popular Tier II and Tier III destinations - Aurangabad, Bhopal, Indore, Mangalore, Rajahmundry, Tirupati and Vijayawada. The all-inclusive inaugural fare on these routes begins from Rs. 1999.SpiceJet will be commissioning a brand new fleet of the latest Q400 NextGen turboprop aircraft from Bombardier, which have been ordered to cater to enhancing the air connectivity to Tier-II and Tier-III towns. The Q400 NextGen turboprop aircraft, which can accommodate 78 passengers, is widely accepted as the best short-haul plane in the world. SpiceJet had placed an order for 30 such aircraft and are in the process of taking delivery of the first 4 aircraft during August. CCI finds no competition issue in Jet-Kingfisher alliance: report The Competition Commission of India has found no competition issue in the 2008 strategic alliance between private carriers Jet Airways and Kingfisher Airlines, according to a report. The report stated that the CCI has reportedly said that "no violation of either Section 3 or Section 4 is found to have been established against Jet Airways and Kingfisher Airlines. The CCI had ordered the probe on the basis of a complaint from a frequent flier that if such an agreement was inked, says report. The report stated that the proposed alliance could result in an abuse of dominance as the two would control market share of close to 60%. Godrej Properties signs agreement with Jet Airways for BKC plot Godrej Properties Limited, the real estate development arm of the Godrej Group has entered into an agreement with Jet Airways Limited (Jet) to develop the latter’s property, C-68, G Block, Bandra-Kurla Complex (BKC), in Mumbai.GPL will develop an approximately 1 million square feet, of saleable area, office building that will be completed in a three year period. GPL will take on the 360crore debt obligation Jet Airways has on the property and will also pay Jet Airways 1.35bn to compensate them for expenses that have already been incurred. Additionally, GPL has agreed to sell 161,460 square feet of carpet area to Jet Airways at development cost. This space will be used as the state-of-the-art new headquarters for Jet Airways. Godrej Properties and Jet Airways will share the profits from the development in a 50:50 ratio.

Yearly Industry Newsletter

24 of 43

Cabinet approves Rs. 12bn equity infusion for AI The cabinet has approved an equity infusion of Rs12 bn ($270 million) into ailing state-run carrier Air India, according to a report.The report stated that Air India has estimated losses of Rs69.94 bn in the year to March 2011, and is in talks with banks to restructure $4 bn of working capital debt. This move came after Prime Minister Manmohan Singh announced in Parliament that the equity infusion into Air India should be expedited. The airline has a debt of Rs. 469.50bn on an equity base of Rs. 21.45bn, says report.Due to constrained financial position, Air India has not been able to pay salary for June and July. Jet Airways, Kingfisher want to shift out of Terminal 3: report Jet Airways and Kingfisher Airlines has reportedly told the ministry of civil aviation that they want to move out of Terminal 3 (T3) to Terminal 1D. The report stated that Jet wants to shift only its low-fare services Jet Konnect and JetLite, while Kingfisher wants to move its entire operations out of the new terminal, says report. Terminal 3 charges more for fuel because of extra infrastructural facilities such as underground pipelines, says report. Air India’s recurring default is negative for banks: Moody's

Yearly Industry Newsletter

25 of 43

International News - August 2011 Boeing bags order from Korean Air: report Boeing Co has received an order from Korean Air for two additional 737-900 extended range jetliners worth $171.6 mn at Boeing list prices, according to a report. The report stated that the airline is in the process of revamping its fleet with technologically advanced airplanes, and completed a cabin refurbishment project for its mid- to long-haul flights early this year. Korean Air currently operates two 737-900 extended range aircraft as well as a combination of 737-800s and -900s in its single-aisle fleet, according to a report. Virgin Atlantic Airways returns to profit, creates 1,000 jobs Virgin Atlantic has announced an £100m investment in product development as it reported a strong year of trading and a return to profit. Despite the winter closure of London Heathrow and the Ash Cloud crisis costing the business a combined £40m, strong growth in business traffic and solid load factors across all cabins delivered a good recovery.Revenues have increased on the airline’s route from London Heathrow to Delhi, India, driven largely by sales in India. Demand remains high with a positive 80% seat load factor.The Pre-tax operating profit was at £18.5mn, while Revenues increased by 13% to £2.7bn. Qantas reveals plans to expand fleet with A320 Family Qantas has selected for the first time Airbus A320 aircraft to launch its new premium airline to service routes to/from Australia and the Asian region. In addition, Jetstar has selected the Airbus A320 to continue its growth in Australia and Asia. The commitment to order a minimum of 106 A320 Family aircraft includes 78 A320neo jets, making Qantas the latest airline to select the world’s best selling single-aisle aircraft.The decision to go with Airbus for its short to medium haul operations underpins the Qantas long term strategy to build up a fleet of the world’s most fuel efficient and reliable aircraft. Boeing, Cathay Pacific announce order for 12 777s Boeing and Cathay Pacific Airways announced the Hong Kong-based carrier has ordered eight Boeing 777 Freighters and four 777-300ER (extended range) airplanes. The order is valued at US$3.3bn at list prices. With this announcement, Cathay Pacific becomes the 15th customer to order the 777 Freighter and increases its Boeing 777-300ER fleet to 50. "We are very pleased to announce this latest Boeing order, which highlights our commitment to operating a modern and efficient fleet together with a deep commitment to our home city, Hong Kong," said John Slosar, Cathay Pacific Chief Executive. "The Boeing 777-300ER is a superb aircraft that has already given a significant boost to our long-haul passenger operations, while the Boeing 777 Freighter will improve our freighter operations by delivering improved payload range capability at competitive operating costs." InterGlobe Tech launches integrated solution for managing airline and cruise crew

Yearly Industry Newsletter

26 of 43

Domestic News - September 2011 Ratan Tata plans to enter civil aviation biz: report Tata Group Chairman, Ratan Tata is planning to get into civil aviation business, according to a report. The report stated that Tata, a trained pilot, is working out deals with international players for business jets, helicopters as well as for aircraft management and maintenance services. Investments in this space are being driven by the group's two main holding companies, Tata Sons and Tata Industries, says report. There are reports that the group is in talks with Florida-based Avantair to establish a partnership in India. Avantair's business model is of fractional ownership, giving individuals and businesses the benefits of whole aircraft ownership at a fraction of the cost, says report. Kingfisher Airlines to quit low cost business: Vijay Mallya Kingfisher Airlines Chairman Vijay Mallya said that it will exit the low cost aviation business.The segment was too competitive and there are enough passengers for a full service operation, Mallya said at the Company's AGM."We are doing away with Kingfisher Red because we do not wish to compete in the low cost segment," Mallya told reporters on the sidelines of Kingfisher's AGM. "We believe that there are more than enough guests who prefer to travel the full service Kingfisher class and that shows through in our own performance where load factors in the Kingfisher class are more than Kingfisher Red".Kingfisher operates the low cost arm under Kingfisher Red. "The margins of Kingfisher class are higher than Kingfisher Red. That is because the yields are better," Mallya said.The private carrier is looking to restructure its fleet by selling and leasing back some of its aircraft to lower debt, Mallya said."The high cost of ATF (aviation turbine fuel) coupled with a weakening rupee is the biggest challenge that the whole aviation industry in India is currently dealing with and we are no exception," Mallya said in his speech at the AGM. Spicejet shareholders clear preferential issue to Kalanithi Maran Spicejet Ltd has announced that the members at the 27th Annual General Meeting (AGM) of the Company held on September 29, 2011, inter alia, have approved the allotment of equity shares up to 35,977,619 to Kalanithi Maran on preferential basis. The shareholders also approved the increase in authorized share capital of the Company, from Rs. 5bn to Rs. 5.65bn. The shareholders also approved the appointment of Kalanithi Maran, Kavery Kalanithi, J. Ravindran, Nicholas Martin Paul and M.K. Harinarayanan as Directors of the company Turkish plane skids while landing at Mumbai airport 97 people, including crew, on board a Turkish Airways flight TK-720 arriving from Istanbul to Mumbai, escaped unhurt as the plane skidded off a rapid exit taxiway on landing at the Mumbai Chhatrapati Shivaji International Airport at 4.13 am on September 2. The plane veered away and got stuck in the mud, officials stated.The accident caused delays as the main runway was closed following the incident. All flight operations have been moved to the secondary runway. The average delay in arrival was 15 minutes and departure 30 minutes. Heavy rains in Mumbai have also been hampering visibility at the Mumbai airport, causing temporary closures of the runway. Efforts are currently underway to remove the aircraft and clear the runway for normal operations. CSIR-NAL and Mahindra Aerospace announce maiden flight of C-NM5 aircraft

Yearly Industry Newsletter

27 of 43

India's CSIR-National Aerospace Laboratories and Mahindra Aerospace has announced the maiden flight of their jointly developed C-NM5 aircraft, marking an important milestone in their collaborative aircraft development programme. The programme is India's first public-private partnership in the development of aircraft, and this milestone event is the result of teamwork across three development teams – CSIR-NAL, Mahindra Aerospace and GippsAero (a Mahindra Aerospace subsidiary in Australia). The C-NM5 is a 5-seat all-metal aircraft powered by a Lycoming IO-540 engine, and features non-retractable landing gear and a spacious cabin with large access doors. The cabin interior is reconfigurable to adapt the aircraft to different roles, while simplicity of systems and ease of maintenance are design drivers throughout the aircraft. The C-NM5 thus complements Mahindra Aerospace's growing family of light utility aircraft that are designed to meet the latest global standards, while operating in environments with limited infrastructure at extremely low costs per seat mile. AI to go ahead with Dreamliner purchase Air India has reportedly said that it has decided to go ahead and purchase the 27 Dreamliner aircraft from Boeing. The Air India board, which met in New Delhi agreed that the 27 aircraft are essential to expand operations and swing the airline back into profitability, says report. The report stated that Rohit Nandan, the chairman and managing director, said that the board has recommended purchase but declined to elaborate. The recommendation will now be discussed by the group of ministers (GoM) who will take the final call when they meet some time next month, says report. Air India had ordered 27 Dreamliners in 2005 as part of its aircraft acquisition programme of 68 aircraft. Jet retains No 1 spot in market share: report Jet Airways and JetLite, combined has retained their first spot in market share among domestic airlines with 26.3% while Kingfisher Airlines topped with a 75 per cent load factor in August, according to a report. The report stated that Kingfisher and IndiGo came neck-to-neck for the second slot with 18.8% and 18.7% market share, while Air India came fourth with 17.4% share. Kingfisher flights had loads of 75.9%,while GoAir and SpiceJet had occupancy of 65% and 66%. Swajas Air to raise Rs. 375mn in IPO Swajas Air Charters Ltd. reportedly plans to increase as much as Rs. 375mn ($7.7mn) selling shares in an Initial Public Offer (IPO). According to reports, the company aims to sell shares at Rs. 90 to Rs. 100 each from Sept. 26 to Sept. 28. Aryaman Financial Services Ltd. will manage the share sale. DGCA plans to lay down guidelines on fares: report Kingfisher says company is viable

Yearly Industry Newsletter

28 of 43

International News - September 2011 Airbus acquires 96.7% of Satair shares Airbus, an EADS subsidiary, announced today that all of conditions for completion of the offer (the “Offer”) by Airbus Denmark Holding ApS (“Airbus DK”) to acquire the shares of Satair A/S (“Satair”), a Danish company listed on the NASDAQ OMX Copenhagen, have been satisfied. The Offer price was DKK 580 in cash per share. At the expiry of the Offer, Airbus DK has received valid acceptances representing approximately 96.7% of the shares of Satair on a fully-diluted basis. The acquisition of Satair will help Airbus to strengthen its service business, which is a key element of the EADS Vision 2020. Consistent with this strategy, this acquisition facilitates the growth of Airbus’ Material Management division and is an opportunity to develop new services through the combined entity in both the civil and governmental markets. Boeing, ANA complete contractual delivery of first 787 Dreamliner Boeing and ANA have signed the formal documents completing the contractual delivery of the first 787 Dreamliner. Celebrations to mark this historic milestone begin tomorrow in Everett with a delivery ceremony followed by flyaway of the airplane on Tuesday. Today's signing comes after a series of flights, inspections and the transfer of funds.Now that the airplane is ready to deliver, the entire team is ready to celebrate," said Scott Fancher, vice president and general manager of the 787 program. "We look forward to honoring our launch customer ANA before they fly their first Dreamliner home to Japan."The Boeing 787 Dreamliner is an all-new airplane featuring a host of technologies that provide exceptional value to airlines and unparalleled levels of comfort to passengers. It is the first mid-size airplane capable of flying long-range routes, enabling airlines to open new, non-stop routes preferred by the traveling public American Airlines unveils new suite of premium products As part of its focus on continually improving the customer experience, American Airlines is introducing a new suite of premium class amenities. The product additions are designed with the customer’s comfort and convenience in mind and will roll out on select international flights in First and Business Class cabins beginning Sept. 1. “We believe this new suite of premium products is a wise investment because it enables us to provide an added level of comfort and style to the inflight environment – a sentiment applauded by customers on international test flights earlier this month,” said Rob Friedman, American’s Vice President – Marketing. “This initiative to further complement our premium customers’ travel experience is another example of our commitment to make American the airline of choice for global travelers.” First Boeing 747-8 resplendent in Lufthansa livery The first Boeing 747-8 Intercontinental emerged from the paint hangar at Boeing’s Everett factory near Seattle last evening resplendent in the Lufthansa livery. After completing extensive ground tests, the aircraft will undergo initial test flights in November, and is scheduled to go into service next spring with the registration D-ABYA. Lufthansa is the launch customer for the passenger version of the Boeing 747-8 and has therefore been involved from the outset in the design of the aircraft.The Boeing 747-8 has been stretched by six metres compared with the Boeing 747-400. The new Jumbo measures 76.3 metres in length, making it the world’s longest passenger airliner. The Boeing 747-8 is also setting new standards in terms of sustainability. For example, the redesigned wings with their state-of-the-art profile and ranked wingtips give the aircraft an aerodynamic advantage. In addition, the newly developed GEnx-2B67 engines offer greater fuel

Yearly Industry Newsletter

29 of 43

efficiency as well as reduced emissions and noise levels. The Boeing 747-8 consumes 13 per cent less fuel than the Boeing 747-400. Boeing promotes new approach for future aviation training Boeing called upon the aviation industry for a revised approach to training that includes the use of online and mobile devices to meet the demand for aviation personnel over the next 20 years. Speaking at the Asia Pacific Airline Training Symposium in Bangkok, Roei Ganzarski, chief customer officer, Boeing Flight Services, said the industry must focus on adopting newer methods of instruction that have proven successful in other fields. Boeing forecasts the need for tens of thousands of flight instructors over the next 20 years to meet demands for new capable and well-qualified airline pilots worldwide."We must advance the training profession in order to attract and retain the passionate and competent talent needed to train the vast numbers of aviation personnel required," said Ganzarski. "We need to train them in a way that is adaptable to a generation steeped in mobile and on-line technology." Boeing research into pilot training around the world highlights the critical role an instructor plays in the learning and performance of pilots. American Airlines plans to trim more capacity this year:report

Yearly Industry Newsletter

30 of 43

Domestic News - October 2011 Vijay Mallya to sell F1 stake to Subrata Roy: report UB Group's Vijay Mallya has sold 42.5% stake in his Force India F1 team to Sahara Group, headed by Subroto Roy, according to a report. Earlier reports had stated that Vijay Mallya has denied selling Force India stakes to Sahara India. Mallya, who also owns the Kingfisher airline, has announced plans to shut down the carrier's budget arm. Force India was formed in 2007 when a consortium led by Mallya and Dutch entrepreneur Michiel Mol bought the loss-making Spyker Formula One team and later renamed it Force India, says report. The stake sale in Force India comes ahead of India’s maiden F1 Grand Prix on Oct. 30 at the 120,000-capacity circuit on the outskirts of Delhi. Sahara agreed to pump in US$100mn for the development of the Force India F1 team, which has been re-christened as Sahara Force India. As per the agreement signed, Sahara Group will be issued fresh shares of Watson Ltd., which owns the team. Missing MIG-29 Crash Site Located On 26 Oct 2011, the Task Force Commander Gp Capt P K Sharma VM, coordinating the search for the missing MiG-29 aircraft and pilot, confirmed locating crash site at 15000’ AMSL above ‘Chokhang’ village in ‘Lahaul’ area. He informed that several components of the aircrafts have been recovered after digging under the snow and rubble. These are being brought down to base camp for proper identification. Earlier the crash site was located by aerial search and imageries received from the Remotely Piloted Aircraft and other aircraft which conducted the photo reconnaissance of the area. Though the inputs were correct, however, since the crashed aircraft had disintegrated into small pieces and the debris was spread across the slopes on either side of the ridge it could not be conclusively identified. Subsequently, sarpanch of ‘Thirot’ village had brought back some components with help of locals, identified to be of MiG-29, from the same area. However, the crash site could still not be confirmed as the area came under fresh snow fall. Also, soot and burn marks along the slopes as seen in our recce imagery as well as by villagers also disappeared under the snow. The IAF search teams were dropped on the ledge 200m above the suspected crash site at an elevation of 15000’ AMSL. This is about 5000’ above the valley base along village ‘Chokhang’. The ground search party was divided in groups to cover the bowl and the slopes on either side of the ridge where the images had indicated presence of debris. At a gradient of 70-80 degree and in an avalanche prone area, the progress could not have been faster. Eight expert mountaineers including three from Army were dropped on the ledge by helicopter. They spent the night on the ledge with just basic survival gear. Visual reconnaissance of the area by helicopter on subsequent days could not confirm the exact crash site since the area was now covered under fresh snow. Govt may allow global airlines to buy into local carriers Shares of Jet Airways, Kingfisher Airlines and Spicejet have advanced on a report that the Government is contemplating allowing overseas airlines to pick up stake in the domestic carriers The report stated that Department of Industrial Policy and Promotion (DIPP) has argued foreign airlines be allowed to pick up a 26% stake in local firms. The civil aviation ministry has asked for the cap to be 24% or lower,says report. Earlier in October, Civil Aviation Minister Vayalar Ravi had reportedly said his ministry had not rejected the FDI proposal sent by the DIPP and the plan was under consideration.

Yearly Industry Newsletter

31 of 43

Saroj Datta retires from Jet Airways Saroj Datta, the Executive Director and Board Member of Jet Airways since inception, completed his service tenure with the Company effective 30th September, 2011, bringing to close an illustrious career of over two decades with India's premier airline. An internationally respected aviation stalwart, Saroj Datta, besides being a leading member of various airline committees, was a key member of the core team of Jet Airways, and had been assigned by the Chairman a pivotal role, along with his other colleagues in the Management, in laying the foundation of Jet Airways in the early 1990s. As the Executive Director of the airline since March 1993, Saroj Datta was instrumental in spearheading the airline's emergence as one of the country’s foremost global service brands and a premier international airline to emerge from India. Saroj Datta brought to bear his vast experience and in-depth understanding of the aviation industry, to ensure a clearer understanding by many of his colleagues of the basic economic principles and requirements of the aviation industry throughout the expanding workforce of the airline particularly during the initial decade. On many occasions, he also played an important role in various wage negotiations, including with his Pilot colleagues Kingfisher to reconfigure all its airbus aircraft over next 4 months Following an announcement made last week about Kingfisher Airlines’ (Kingfisher) focus on the full service segment of air travel, there has been a lot of speculation in sections about the media around. Sanjay Aggarwal, CEO, Kingfisher Airlines Ltd stated" I would like to set the record straight and clear up any misconceptions around this announcement. It is important to carefully analyse and understand the low cost or low fare segment of the Indian aviation industry. Operating costs of so called low cost carriers and full service carriers in terms of fuel, airport charges, engineering and maintenance and crew costs are similar. Full service carriers incur additional costs on global distribution, in-flight catering, ground amenities and the frequent flyer programme. These additional costs are more than recovered through higher yields.In addition to large aircraft orders placed at time of start up in 2004/2005, the Indian LCCs in the recent months have placed orders for over 250 aircraft. In the last two years, capacity induction of the LCCs has outpaced the demand growth in the domestic market. The induction of so many additional aircraft in the low cost / low fare segment will potentially lead to substantial over capacity and a price war with declining yields. Kingfisher’s integration into the oneworld alliance is on track. oneworld is supportive of Kingfisher’s move to focus its energy and resources on a full service and premium product which is in line with the philosophy of oneworld and its member airlines. Over the next 4 months Kingfisher will reconfigure all its airbus aircraft including its single cabin aircraft into dual cabin aircraft with a reduced premium business class cabin and an increased number of full service economy class seats leading to a capacity increase of approximately 10%. MAS Aerospace Engineering's Indian JV ready to take off MAS-GMR Aerospace Engineering Company Ltd (MGAE), a 50:50 joint venture (JV) between Malaysian Aerospace Engineering Sdn. Bhd (MAE), a subsidiary of Malaysian Airline System Bhd, and GMR Hyderabad International Airport Ltd. (GHIAL), a subsidiary of GMR infrastructure limited in India, is expected to be launched soon during the month of October 2011.This joint venture is a third party Airframe Maintenance, Repair and Overhaul (MRO) facility, the first of its kind of its scale, located in the special economic Zone (SEZ) at the Rajiv Gandhi International Airport, Hyderabad in

Yearly Industry Newsletter

32 of 43

India.MGAE has one wide body hangar, one narrow body hangar with three bays and an another paint cum narrow body hangar with associated workshops.It has the capability to provide base maintenance services, starting with narrow bodied aircraft like Airbus A320, ATR 42/72 and Boeing 737–NG, and subsequently wide-body aircraft like A330 and Boeing 77 Jet Airways signs pact with Vietnam Airlines: report

Yearly Industry Newsletter

33 of 43

International News - October 2011 IATA urges vigilance from govt and other aviation stakeholders The International Air Transport Association (IATA) urged governments and other aviation stakeholders to join airlines in a partnership to improve aviation security and the experience of both travelers and shippers. Key to this is early adoption of IATA’s Checkpoint of the Future (CoF), a supply chain approach to cargo security, harmonization of measures among governments and constant vigilance to new threats. “With a decade of experience in the post 9.11 world, it is time for a holistic review of what has been created. There are a lot of things we do right and there is lot that could be improved. I am convinced that by working in partnership we can find a better way. Security is a top priority for everyone associated with the aviation industry. We must find ways to improve both the security of the system and the satisfaction of those who use it,” said Tony Tyler, IATA’s Director General and CEO. Tyler’s comments were made in an address to the AVSEC World Conference and Exhibition which has gathered nearly 500 industry leaders in Amsterdam.In the aftermath of last year’s incident concerning printer cartridges being shipped from Yemen, governments continue to look for ways to further tighten air cargo security. “The future of air cargo security is a multi-layered approach involving the whole supply chain and including both advanced electronic information and physical screening. But we don’t want to see 100% screening at airports, which would grind global commerce to a halt,” said Tyler. This year airlines are expected to carry some 46 million tonnes of air cargo which will account for about 35% of the total value of goods traded internationally. Singapore Airlines welcomes ACCC draft approval of alliance with Virgin Australia Singapore Airlines welcomed the Australian Competition and Consumer Commission’s (ACCC) draft approval of its proposed alliance with Virgin Australia. Regulatory approval will enable Singapore Airlines and Virgin Australia to build an integrated alliance, with an expanded network and seamless service offerings for travellers. The alliance will connect Singapore Airlines' global network with Virgin Australia's wide range of Australian and Pacific destinations, offering customers seamless connections, convenient flight schedules, access to more airport lounges and greater opportunities to earn and redeem frequent flyer miles. Turkish Airlines becomes official partner of WTA tournament Turkish Airlines added a new asset to its sports sponsorship portfolio by becoming the official airline partner of the TEB BNP Paribas WTA Championships, the season-ending finale of the WTA (Women’s Tennis Association). The TEB BNP Paribas WTA Championships are set to take place at the Sinan Erdem Arena from October 25-30, 2011 and feature the world’s top eight singles players - led by World No.1 and Turkish Airlines ambassador Caroline Wozniacki – and top four doubles teams who will compete for the coveted title and a share of the $5 million in prize money. “Turkish Airlines has been a great partner to the WTA’s World No.1 player Caroline Wozniacki and it’s great that they’ve decided to further extend their sponsorship of women’s tennis,” said Stacey Allaster, Chairman and CEO of the WTA. “Having one of the best airlines in Europe join a great roster of partners of the TEB BNP Paribas WTA Champinoships shows the power of women’s tennis as a global marketing platform.” Bangkok Airways launches direct flights to Bangalore

Yearly Industry Newsletter

34 of 43

Domestic News - November 2011 No Kingfisher flights canceled: Sanjay Aggarwal Kingfisher has clarified that the airline industry in India is going through a tough period due to high costs and lower yields. This is evident by the unprecedented losses recently reported. To counter these pressures and leveraging its strengths, Kingfisher decided to rationalize network, drop unprofitable flights and expedite its fleet reconfiguration. This initiative will improve the long term profitability of the airline. The reconfiguration initiative will require up to 3 aircraft to be out of service over the next three months at any one time for this exercise to be completed. It will reduce the number of fleet configurations from 7 to 3, improving operational flexibility. This initiative will add more seats to the fleet, improving revenue production of each aircraft. The actions over the last few weeks have been to implement the above strategy in a pre-determined and well-controlled fashion. Kingfisher Airlines has rationalized its network to offer maximum and seamless connectivity. As per the revised schedule, it will offer 300 daily flights connecting 54 cities as compared to its previous schedule of 340 flights. The revised schedule is being loaded in the system and guests can confidently continue booking Kingfisher flights. Jet Airways takes delivery of 100th aircraft Jet Airways has achieved a major milestone — the induction of the 100th aircraft into its fleet. The airline accepted a brand new, Next Generation Boeing 737-800 with sky interiors n Seattle on November 15, 2011. The 100th aircraft will be the third all new Boeing 737-800 configured with 8 Premiere and 162 economy seats, and will commence commercial operations from December 5, 2011. New improved passenger service units and a significantly quieter cabin will add to the comfort of the guests. The new Boeing 737 – 800 aircraft also possess superior on board, sound quality and clarity through new speakers that have been improved in each passenger row. The all new Sky Interiors with curved cabin architecture further provide a feeling of openness and space. Kingfisher Airlines hasn't sought bailout: Vijay Mallya Kingfisher Airlines Ltd. has not approached the Union Government or its lenders for any kind of financial bailout, Chairman Vijay Mallya said. He also said that Kingfisher Airlines has repaid all the dues to Indian Oil Corp. (IOC) and BPCL in full while the outstanding to HPCL was down to just Rs. 400mn. Mallya also reiterated his backing of Foreign Direct Investment (FDI) in the Indian civil aviation sector, saying that only an airline can understand the aviation business. He expressed hope that the Government will consider the option at some point in future.Kingfisher Airlines has formally applied to the DGFT and the Union Commerce Ministry, asking them for permission to directly import fuel in order to cut its soaring fuel bill, Mallya said. On the issue of mass cancellation of flights, Mallya said that Kingfisher Airlines can’t afford to fly on loss-making routes. But, he admitted that the private carrier could have handled the cancellations better.Mallya also clarified reports that Kingfisher Airlines was shutting down its no-frills service Kingfisher Red. He said the carrier was planning to phase out the budget arm. He termed the decision as commercially prudent, as yields in Kingfisher Red are lower than the yields on the full-service business.Mallya also said that Kingfisher Airlines has undertaken aircraft re-configuration to improve its overall performance. DIPP recommends 26% FDI in aviation sector

Yearly Industry Newsletter

35 of 43

A draft Cabinet note by the Department of Industrial Policy and Promotion (DIPP) has reportedly recommended 26% Foreign Direct Investment (FDI) by foreign airlines in domestic carriers.According to report, anything below 26% would not attract strategic investment from foreign airlines because in that case they will not have any powers to block a special resolution in a board meeting under the Indian company laws. Private airlines are in need of funds for their operations and service up gradation to compete with other global carriers. Overseas entities, other than foreign airlines are allowed to invest up to 49% in domestic passenger airlines. Non-resident Indians can invest 100%, added reports Jet Airways needs money to meet obligations, fund JetLite: Auditors Auditors to Jet Airways has said that the needs to raise money in order to meet its obligations and fund JetLite, according to reports.Auditors also reportedly said that the appropriateness of assumption of going concern is dependant upon the company's ability to raise requisite finance or generate cash flows in future to meet its obligations.Jet reportedly said that said it is planning to raise $300 mn in sale and leaseback of 40 aircraft owned by the company India investigators probing agreement signed by AI: reports Vayalar Ravi, Minister of civil aviation has reportedly said that India’s federal investigators are probing an agreement signed by Indian Airlines, which was merged with Air India in 2007, for purchase of 43 Airbus SAS aircraft. The report stated that the preliminary inquiry by the Central Bureau of Investigation began on Jan. 14 last year and is still under progress. Kingfisher Airlines close to raising US$370mn from Indian investor, banks: report Kingfisher Airlines, Chairman, Vijay Mallya, has reportedly it was was close to sealing a $370 mn deal with an Indian private investor and a consortium of banks, according to report.The airline was nearing a deal with 14 banks led by State Bank of India, says report. Earlier this week, Kingfisher net loss for the September quarter was doubled.The report stated that the airline is concluding a deal with the banks to reduce the interest rate which the airline is currently paying on its $1.4 billion debt pile. Jet Airways may go for sale and lease-back its aicraft: reports India seeks US investment in aviation sector Kingfisher Airlines: Aercap to take back two aircraft SBI asks Kingfisher Airlines to raise Rs. 10bn fresh equity

Yearly Industry Newsletter

36 of 43

International News - November 2011 IATA urges cooperation and innovation across aviation value chain The International Air Transport Association (IATA) urged cooperation and innovation across the aviation value chain and with governments to take advantage of aviation’s ability to drive economic growth.“The global connectivity that aviation provides is the lifeblood of the global economy. Around the world, aviation supports33 million jobs and $3.5 trillion in economic activity—$1.2 trillion of this in the US alone. The world is thirsty for our product, giving us tremendous potential for growth and innovation. But there are no guarantees in turning that potential into reality. Aviation is a team effort. The industry value chain and governments must work even more closely together to ensure safe, secure, efficient and environmentally responsible air services,” said Tony Tyler, IATA’s Director General and CEO in an address to the International Aviation Club in Washington.Tyler highlighted safety as an example of the success that can be achieved when industry and governments work together with a common goal that drives constant innovation. “In the decade ending this year, airlines will have safely transported over 23 billion people and nearly 426 million tonnes of cargo. Those amazing statistics are the result of our rich history of working together to address the fundamental challenge of safety with global standards that are consistently applied,” said Tyler. Rolls-Royce and AviancaTaca sign Trent 700 agreement Rolls-Royce, the global power systems company, has signed a Memorandum of Understanding (MOU) to provide Trent 700 engines to AviancaTaca for four Airbus A330 aircraft. The agreement includes Rolls-Royce TotalCare long-term engine services and support. The aircraft will be acquired by AviancaTaca and operated by its subsidiary, Tampa-Cargo. The aircraft will establish Tampa-Cargo as the first A330 freight operator in Latin America. The MOU is subject to final contractual agreement. Boeing bags US$21.7bn order from Lion Air Boeing and Jakarta-based Lion Air announced a commitment for the airline to order 201 737 MAXs and 29 Next-Generation 737-900 ERs (extended range). The agreement also includes purchase rights for an additional 150 airplanes. "The 737 MAX will be the future of Lion Air," said Rusdi Kirana, Lion Air Founder and President Director. "The highly efficient, technologically advanced airplane will help Lion Air continue to bring low fares and allow us to open new destinations because of the longer range of the airplane." With 230 airplanes at a list price of $21.7 billion, this deal when finalized will be the largest commercial airplane order ever in Boeing's history by both dollar volume and total number of airplanes. Boeing and Lion Air are working to finalize details of the agreement, at which time it will be a firm order posted on the Boeing Orders and Deliveries website. Lion Air will also acquire purchase rights for an additional 150 airplanes valued at more than $14 billion if exercised at list prices. Qantas, AA get nod for JV: reports Qantas Airways and American Airlines has reportedly said that they have received regulatory approval to commence joint business between North America and Australia/New Zealand.The report stated that the joint venture continues to grow with American Airlines code placed on Qantas flight between Dallas /Fort Worth and Sydney. A320 fitted with fuel-saving Sharklets prepares for flight-tests

Yearly Industry Newsletter

37 of 43

Airbus has completed installation of the first set of ‘Sharklet’ wing-tip devices on the company’s A320 development aircraft (MSN 001), preparing for the flight-test campaign in the coming weeks. Sharklets, which have been specially designed for the Airbus A320 Family, will reduce fuel burn by up to 3.5 percent, corresponding to an annual CO2 reduction of around 700 tonnes per aircraft. This reduction is equivalent to the CO2 produced by around 200 cars annually. These new wingtip devices are around 2.5 metres tall and will replace the aircraft’s current wingtip fence. Offered as an option on new-build aircraft, as well as being standard on the A320neo Family, Sharklets will also enhance the aircraft’s payload-range and take-off performance.

Yearly Industry Newsletter

38 of 43

Domestic News - December 2011 PM meets airline chiefs: reports Indian air carriers Chiefs met the Prime Minister, Dr Manmohan Singh, to seek Government help for the airline industry, according to reports.The report stated that several airlines chiefs including Jet Airways Chairman, Naresh Goyal, Indigo promoter, Rahul Bhatia, Spice Jet CEO, Neil Mills, and Go Air owner, Jeh Wadia attended meet.The meeting comes in the wake of some airlines demanding change in the aviation policy to allow foreign airlines to pick up stake in Indian carriers, says report.Dr Singh reportedly had said that private sector airlines should be managed efficiently.Three airlines reported loss in the second quarter which includes Spicejet, Jet Airways and Kingfisher Airlines. Aviation ministry proposed FDI in local carriers: reports The aviation ministry has proposed allowing foreign airlines to invest under 26% in Indian carriers and the final decision will be made by the cabinet,according to reports.The report stated that India allows up to 49% foreign investment in Indian carriers.Indian carriers such as Air India , Jet Airways and Kingfisher Airlines , have high debt on their books, says report.SpiceJet reportedly said that it will evaluate selling stake to a foreign carrier if the government were to change FDI rules. Jet Airways to lease 10 Airbus A320s: reports Jet Airways Ltd is in talks to leasing companies to acquire more than 10 Airbus A320s through a sale and leaseback option, according to reports.The report stated that Jet will use the A320s to replace its ageing JetLite fleet which it had acquired from Sahara India in April 2007 for Rs. 14.50bn. JetLite has a fleet of 18 737 single-aisle aircraft and flies to 27 domestic routes and one international destination, says report. Govt working on new civil aviation policy: Zaidi The ministry of civil aviation is working out a new policy to factor in needs of the fast-growing sector over the next ten years, secretary Nasim Zaidi said. “We have about five months to complete the process,” he said while inaugurating the conference titled ‘Air Cargo as Engine of Economic Growth’ organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).The new policy will encourage private sector investments and lay emphasis on setting up an air cargo promotion board, Zaidi said. With GDP growing annually at nearly eight per cent, the air cargo industry has been averaging annual growth of 12 per cent.The total cargo handled by Indian airports in 2010-11 was 2.33 million tonnes, up from 0.5 million tonnes in 2005-06. While the domestic cargo is expected to increase from 0.8 million tonnes to 1.7 million tonnes by 2016-17, the international cargo traffic is projected to move up from 1.5 million tonnes to 2.7 million tonnes in the same period. The air freight stations at Mumbai and Chennai will be operationalised soon to keep up with the booming traffic, said Zaidi. “We need to decongest cargo terminals with simplification of customs procedures, greater use of mechanised handling and speedy clearances of shipments. India has the potential to emerge as a global trans-shipment hub.”Najib Shah, chief commissioner at the Central Board for Excise and Customs, said authorities have put in place a risk management system for self-declaration by exporters. Efforts are being made to upscale infrastructural facilities and reduce dwell time. I-T Dept freezes bank accounts of Kingfisher, AI Air India and Kingfisher Airlines suffered after several of their bank accounts were frozen by the Mumbai service tax department for non-payment of dues, according to reports.The reports stated that Air India made a payment of Rs.

Yearly Industry Newsletter

39 of 43

150mn following which its bank accounts were de-freezed. Kingfisher Airlines has to pay Rs. 700mn to clear its service tax dues, according to reports.There are reports that this is the second time that Kingfisher's accounts have been frozen in the last two months.There are also reports that service tax department has also issued several show-cause notices to Jet Airways on non-payment of tax on import of various services amounting to Rs. 11.28bn for a period of seven years from 2003-04. Kingfisher flights continue to operate as normal: Prakash Mirpuri Prakash Mirpuri, Vice President – Corporate Communications, Kingfisher Airlines Limited said"As a matter of policy we do not comment on supplier and partner relationships. However we would like to reassure all our guests that all our flights will continue to operate as normal as per the revised schedule published on our website.” Naresh Goyal gets I-T notice on foreign accounts: reports The Income Tax Department (IT) has sent two notices to Naresh Goyal, promoter and chairman of Jet Airways, asking for an explanation of overseas accounts held by him, according to reports. The reports stated that these notices have been sent under Sections 148 and 131 of the Income Tax Act.Naresh Goyal reportedly said that they have complied with the notice received from the Income Tax Department under Sections 131 and 148 of the IT Act. Finance Ministry rejects AI debt recast plan: report Deccan Cargo plans to rework business model: reports Subrata Roy gives Rs. 7.5bn loan to Vijay Mallya's Kingfisher Airlines: reports Finance Ministry has not rejected debt recast: AI

Yearly Industry Newsletter

40 of 43

International News - December 2011 AMR and American Airlines file for Chapter 11 reorganization AMR Corporation, the parent company of American Airlines, Inc. and AMR Eagle Holding Corporation, announced that in order to achieve a cost and debt structure that is industry competitive and thereby assure its long-term viability and ability to continue delivering a world-class travel experience for its customers, the Company and certain of its U.S.-based subsidiaries (including American and American Eagle), filed voluntary petitions for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York.AMR's Board of Directors determined that a Chapter 11 reorganization is in the best interest of the Company and its stakeholders. Just as with the Company's major airline competitors in recent years, the Chapter 11 process enables American Airlines and American Eagle to continue conducting normal business operations while they restructure their debt, costs and other obligations.American Airlines and American Eagle are operating normal flight schedules today, and their reservations, customer service, AAdvantage program, Admirals Clubs and all other operations are conducting business as usual. IATA downgrades central forecast for airline profits The International Air Transport Association (IATA) announced revisions to its industry outlook. For 2011, profitability remains weak but unchanged at $6.9 billion for a net margin of 1.2%. Looking ahead to 2012, IATA downgraded its central forecast for airline profits from $4.9 billion to $3.5 bn for a net margin of 0.6%. The Eurozone crisis puts severe downside risk on the 2012 outlook as illustrated by the recently published OECD economic outlook. In a worst case scenario, should the Eurozone crisis evolve into a full-blown banking crises and European recession, IATA estimates that the global aviation industry could suffer losses exceeding $8 billion in 2012. “The biggest risk facing airline profitability over the next year is the economic turmoil that would result from a failure of governments to resolve the Eurozone sovereign debt crisis. Such an outcome could lead to losses of over $8 billion—the largest since the 2008 financial crisis,” said Tony Tyler, IATA’s Director General and CEO. “The global forecast for 2011 is unchanged at $6.9 bn. But regional differences have widened, reflecting the very different economic environments facing airlines in different parts of the world. And the overall margin of 1.2% tells you just how difficult the battle for profitability in this business is,” said Tyler. Normal operations to continue worldwide: American Airlines American Airlines, Inc. announced that its parent company, AMR Corporation, and certain United States-based subsidiaries today voluntarily filed for Chapter 11 reorganization under United States law. American took this action in order to achieve a cost and debt structure that is competitive in the airline industry so that it can continue delivering a world-class travel experience for its customers.American expects to continue normal business operations throughout the reorganization process, and the business will continue to be operated by the Company's management. The United States Chapter 11 reorganization process enables a company to maintain normal business operations while it establishes a competitive cost and debt structure. This action has no direct legal impact on any American Airlines operations outside the United States. American Airlines is operating normal flight schedules, honoring tickets and reservations as usual, and making normal refunds and exchanges. American's AAdvantage frequent flyer program is not affected. American remains part of the oneworld alliance, of which it is a founding member, and

Yearly Industry Newsletter

41 of 43

all of its codeshare partnerships continue, enabling customers to earn and redeem miles on convenient flight options worldwide. Singapore Airlines, Virgin Australia announce new Darwin services Singapore Airlines and Virgin Australia today announced the first two milestones of their recently approved alliance: new international and domestic routes to Darwin and the launch of frequent flyer programme co-operation.As part of a joint plan to increase services to northern Australia, Singapore Airlines’ regional full service airline, SilkAir, will begin a four-times-weekly service between Singapore and Darwin from 26 March 2012, and Virgin Australia will complement these services with a daily service between Sydney and Darwin from 2 April 2012.The two airlines also confirmed that from 20 December this year, they would commence reciprocal frequent flyer recognition, enabling KrisFlyer members to earn and redeem frequent flyer points on Virgin Australia’s entire network and Velocity members to earn and redeem frequent flyer points on Singapore Airlines-operated flights[2]. Reciprocal lounge access is also available for eligible customers. Airbus delivered 7,000th aircraft-an A321, to US Airways Airbus delivered its 7,000th aircraft, an A321, to US Airways – the airline that operates the largest fleet of Airbus aircraft in the world – from the Airbus facility in Hamburg, Germany. This milestone comes just two years after the delivery of Airbus’ 6,000th aircraft which underlines the continued vibrancy of the commercial aviation sector and the market’s clear vote for eco-efficient aircraft. The 1,000th Airbus delivery was an A340-300 that went to Air France in 1993, nineteen years after the first Airbus aircraft was delivered – an A300B2 also to Air France, in 1974. The 2,000th delivery was six years later in 1999. It took half that time, just three years, to get to the 3,000th delivery in 2002 and three more years to reach 4,000 deliveries. The tempo went up another notch taking Airbus only two years to hand over its 5,000th aircraft, an A330-200 to Qantas in December 2007. The 6,000th Airbus was an A380 which was delivered to Emirates in January 2010. American Airlines’ Tom Horton elected oneworld Chairman The Governing Board of oneworld, the premier global airline alliance, has elected American Airlines’ Chairman, President and Chief Executive Tom Horton as its Chairman.He takes on the role from Gerard Arpey, whom he succeeded at the helm of the alliance’s US partner late last month following Mr Arpey’s decision to retire from the carrier. Tom Horton’s nomination was made at the oneworld Governing Board’s final meeting of the year, held in New York, where the alliance’s headquarters has been based since June. He will act as “first among equals” of the chief executives of the group’s member airlines, leading oneworld as the alliance undergoes its biggest expansion in five years with the addition in 2012 of airberlin, Kingfisher Airlines and Malaysia Airlines. Thomas Cook plc revenue up 10% Saudi Arabia to open skies to foreign airlines Emirates gets 2012 Off to Flying start with First ever global Sale Etihad Airways offers special fares to Ireland in 2012

Yearly Industry Newsletter 42 of 43

Notes

43

Published in 2011. © India Infoline Ltd 2011 This report is for the personal information of the authorised recipient and is not for public distribution and should not be reproduced or redistributed without prior permission. The information provided in the document is from publicly available data and other sources, which we believe, are reliable. Efforts are made to try and ensure accuracy of data however, India Infoline and/or any of its affiliates and/or employees shall not be liable for loss or damage that may arise from use of this document. India Infoline and/or any of its affiliates and/or employees may or may not hold positions in any of the securities mentioned in the document. The report also includes analysis and views expressed by our research team. The report is purely for information purposes and does not construe to be investment recommendation/advice or an offer or solicitation of an offer to buy/sell any securities. The opinions expressed are our current opinions as of the date appearing in the material and may be subject to change from time to time without notice. Investors should not solely rely on the information contained in this document and must make investment decisions based on their own investment objectives, risk profile and financial position. The recipients of this material should take their own professional advice before acting on this information. India Infoline and/or its affiliate companies may deal in the securities mentioned herein as a broker or for any other transaction as a Market Maker, Investment Advisor, etc. to the issuer company or its connected persons.

India Infoline Ltd. IIFL Centre, Kamala City, Senapati Bapat Marg, Lower Parel (W), Mumbai 400 013.

For any content related queries, write to: The Editor at editor@indiainfoline.com

Yearly Industry Newsletter

of 43