Four Corners
Our high-flying columnists from the four corners of the globe muse over a varied feast of subjects: airport basics, foreign direct investment, inflight wines and all-important customer service
EUROPE The simple things in life
So another summer has come to its end and I can conclude I haven’t done one trip this summer without the flight being full, full, full.
Tina Andreasson
Castello Monte Vibiano Food & Services, Italy
“While hanging around airports, I can’t help thinking
that it’s about getting the basics right”
INDIA Is it time to welcome foreign investment?
Aviation in India still has to overcome several challenges before a turnaround happens. Capital infusion is seldom a solution to any weak business model.
Zafar Siamwala
chief operating officer Oberoi Flight Services
Doha, India and Mauritius “Foreign direct
investment may bring much-needed long- term financial and strategic capital”
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www.onboardhospitality.com
Foreign Direct Investment (FDI) in aviation may bring in much-needed long-term financial and strategic capital and
expertise.The industry has to overcome high fuel costs, stiff competition and its capital-intensive nature with high fixed costs. Fuel costs, the largest cost for airlines, impacts operating margins, which are beyond an airline’s control. Aviation turbine fuel (ATF) prices are driven by changes in global crude oil prices.
Currently, the national sales tax average is 26 per cent on ATF, a
major burden for Indian carriers whose fuel accounts for 56 per cent of operating costs.
If ATF is categorised as a declared good, it would reduce sales tax from an average of 24% to 4% and have a positive impact on airline finances. The airline industry is also capital- intensive, with high fixed costs for aircraft acquisition, leasing and maintenance. Additional costs for training pilots, technical support and crew members are also fixed. The effect of FDI will not be immediate. Carriers from the Gulf, as well as IAG and Singapore Airlines have all been watching the sector. In the 1990s deregulation allowed private carriers on domestic routes and India permitted up to 40 per
cent FDI, including those by foreign airlines. At that time, both Gulf Air and Kuwait Airways acquired a 20 per cent stake in Jet Airways. But in 1996, the government announced that foreign airline shareholdings were not in the interests of Indian aviation and scrapped the policy. The concern was that foreign airlines would feed their offshore hubs, relegating the Indian carrier to a regional status.
So what has changed? The crisis in Indian aviation, meaning almost every carrier (except IndiGo) is facing financial stress, has created an environment in which all measures to support recovery have to be considered, even those which have been off the table so far.
Work has taken me several times to Sicily and apart from the fall of windjet, which left only one airline on the route from Rome to Catania, most times it meant boarding starting at the time meant for take off and take off commencing at the time meant for landing. Crowded airports with happy tourists waiting around in good holiday spririt – it always amazes me to see how much patience people have when travelling on holiday. Autumn is here and I have
noted there is a different crowd of passengers waiting at the airports. For sure, there is an older generation that has extended their holidays to a later part of the year – I think they have discovered that the travelling is easier for another month or so until the Christmas season approaches.
As for me, while hanging around airports I can’t help thinking sometimes that ‘it’s about getting the basics right.’ Like adequate seating for instance, a speedy baggage claim, clear signs and smooth traffic flow – all, very small but significant things airports can do to improve the passenger experience.
One of my pet peeves is the bathroom automation trend, which would be fine if the sensors actually worked when you waved your hands wildly to get a trickle of water or a squirt of soap, but they often don’t. I wish for bigger stalls that can accommodate luggage, as well as shelves in the stalls and near the sinks. One great thing to welcome is more places to relax. At my home airport there’s a bar in the baggage claim area which I love to use, especially after a long flight. That cappuccino tastes really good, and when finished, usually my luggage has arrived. I wish you all Happy Holidays and a Great 2013.
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