2008 was an “interesting” year

The Chinese have a saying “May you live in interesting times”. 2008 was certainly “interesting” to say the least. As we bid adieu to the year, I briefly recap some of the topics that made the aviation world interesting.

Private greenfield airports
Bengaluru International Airport at Bangalore, and Rajiv Gandhi International Airport at Hyderabad, ushered in a new era for passengers from the two cities. In Mumbai and Delhi the private managements began extensive modernisation plans.

The government in Bangalore, which had hitherto ignored the old HAL airport and the plight of passengers, too, came on board. BMTC introduced its state of the art Vayu Vajra Volvo airport shuttle buses. Even today, there is no more economical, comfortable, and safer mode of transport to and from the distant airport, than the “VV”. Congrats to the team at BMTC.

Aviation Turbine Fuel
The populist fuel taxation policies of both the Union and state governments in India, ensures that ATF Jet A-1 fuel prices in India, are about twice the price, compared to international prices. With crude oil at $150 a barrel a price of ATF just exploded in India, bleeding the airlines dry.

Air traffic implodes
2008 was the year reality hit home. Thanks to the “perfect storm” of sky-high fuel prices and diminished demand thanks to a global economic slow down, air traffic all over the world reduced to painful levels. In India, where many airlines had entered and/or expanded, without a robust business plan, air traffic just imploded. Air traffic which was growing in excess of 30 per cent year on year, contracted by 20 per cent or more. Air cargo shrank more than 13.5%, the largest drop since 9/11. The grandiose international plans of Kingfisher and Jet evaporated, and all domestic airlines suffered. Aircraft were returned, sold off, or de-registered.

The Indian airline industry, which till this year, was the hottest topic in world aviation circles, will contribute 33% of global airline losses, despite being only 2% of the global airline business.

Airline consolidation
The airline industry saw waves of consolidation. Delta and Northwest merged to create the world’s largest airline, one which will soon fly to 6 continents (excluding Antarctica). Lufthansa, considered one of the most conservative airlines, continued its buying spree, absorbing Austrian. British Airways is aggressively pushing anti-trust issues for its alliance with American.

In India, the unthinkable happened. The two bitter rivals, Jet Airways and Kingfisher Airlines announced an alliance. It was akin to British Airways and Virgin getting in to bed together.

Staff lay-off
The airlines were bleeding, and employees felt the impact. Airlines, globally, started axing people. In India, we witnessed lay-offs by all airlines. Most were done quietly and slowly, away from public and political scrutiny. Jet Airways made the mistake of not following this route. We all saw the live world soap opera being played out on national television. The sacking, the protests that followed, the political pressure applied behind the scenes, and then Jet Chairman Naresh Goyal tearfully re-instating the “family members” i.e. sacked employees.

But the starry eyed sky dreams of many youth waiting to enter the skies have come crashing back to earth.

Rise of the Gulf
With oil prices rising, and airlines, globally, running for cover, scaling back operations, the one region that was making money, the Gulf, saw its airlines rise. Emirates, Etihad, Qatar, have ordered new aircraft, taken delivery, and expanded operations.

In India, Emirates has replaced Singapore Airlines as the most dominant carrier, and its has even more ambitious growth plans for the world, including India.

Bio-fuel and Green
With sky-high oil prices, the green movement finally found acceptance. Virgin Airlines flew a Boeing 747 London to Amsterdam partly fuelled by bio-fuel. One of the plane’s four engines was powered by a 20 per cent mix of coconut and babassu oil. The airlines’ International Air Transportation Association, published a report soon after stating as its goal a “zero carbon future. Air New Zealand just flew a Boeing 747 with one of its four engines fuelled by a 50% mix of Jatropha and Jet A-1. Continental Airlines will do a similar test in early 2009.

These tests mean a lot for India, which is a major source of Jatropha. But, with oil prices dropping, it remains to be seen whether airlines and government will come together for long term economic security or short term gains.

Dreamliner – the world’s rarest aircraft
Aircraft manufacturer Boeing, had a torrid year. Strikes, nut-plate issues, and other production issues has set their commercial aircraft programs, both existing and new, back by as much as two years. With the current economic climate, the delays have become a real risk issue for Boeing. The much publicised, much awaited, Boeing 787 Dreamliner, remains a dream. One of Boeing’s customers called the Dreamliner the “world’s rarest aircraft”.

Airbus A380 superjumbo gets on track
Meanwhile, Airbus has been hard at work getting its A380 superjumbo back on track. While it has a way to go, Airbus has achieved its revised target of delivering 12 A380s this year.

It was rather amusing to read that the pilots on the Emirates A380s were finding the aircraft “too quiet” to sleep. Something we as passengers always crave.

ISRO achieved a major milestone and put its Lunar probe on the moon. Congratulations to the entire team at ISRO.

Travel agents zero commission
In a brilliantly executed strategy the travel agents in India achieved what only agents in Japan had achieved before. They made airlines reverse their implementation of zero commission. Not only did they reverse the policy, at the end of negotiations, the agents, actually increased the amount of their commissions.

Ground Handling
In a poorly thought and designed ground handling policy, supposed to be implemented by January 1, 2009, the government has achieved the impossible. They have united the airlines, foreign and domestic, and the employees and their trade unions in opposition to the policy. The fight will run on in to the new year.

Bangalore Aviation
And finally, I finally learnt how to blog. Bangalore Aviation came online on 14-March-2008. To me this blog is a labour of love. I look forward to your support to earn income from this blog, which is donated to education initiatives of Rotary in and around Bangalore. So please do click on the ads of the sponsors.

My sincere thanks to all the readers of Bangalore Aviation for the support you have extended.

May the year 2009 bring you happiness and prosperity. May you be over burdened with loads of cash, lots of love, tons of health, and plenty of peace.

Happy new year in advance.

Devesh Agarwal

About Devesh Agarwal

A electronics and automotive product management, marketing and branding expert, he was awarded a silver medal at the Lockheed Martin innovation competition 2010. He is ranked 6th on Mashable's list of aviation pros on Twitter and in addition to Bangalore Aviation, he has contributed to leading publications like Aviation Week, Conde Nast Traveller India, The Economic Times, and The Mint (a Wall Street Journal content partner). He remains a frequent flier and shares the good, the bad, and the ugly about the Indian aviation industry without fear or favour.

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