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Post Info TOPIC: CONGESTION CHARGE LETS DEBATE ON THIS


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CONGESTION CHARGE LETS DEBATE ON THIS
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 With other airlines following Kingfisher,s policy of taxing air travellers with a congestion charge. I wonder is it fair on airlines part to levy its pax with airspace crowding up there??? I think its time that its these airlines who should be taken to consumer courts or a PIL filed against them in courts..


 When i was completing my MBA logistics at sydney uni. I did a research on how australia govt was planning to put up a dynamic tolling system in place in cities and towns . The concept talked that each vehicle which runs in the city is adding to the congestion on the city roads. Hence the toll was supposed to be debited frm each vehicles a/c whenever they went to a gas station for refuelling. The tolling tarrifs also varried from the level of congestion and the type of vehicle and number of kms the vehicle ran  before getting itself refuelled. All this could be collected using a computer chip id tags which were to be fixed in all vehicles


 


 Nw if i talk about the same in aviation related sense. I guess DGCA or Ministry of civil aviation should be stepping up and playing a proactive role. Assuming that a parking and landing slots are a scarce commodity at Indian airports which actually seems to be impression give to us after we are being slapped with a congestion charge. Then each airplane flying in the air contributes to the congestion at the airports both while taxing, landing, takeoff..


 Hence it should be airlines who wud be paying up the same. Then depending upon the type of aircraft the congestion charge cud vary. For example small airplanes should be taxed at the highest with widebody jets having the lowest slab. The idea is that if a particular slot is being used by an ATR which is 40-70 seater aircraft the same slot could have been used by a boeing 747 which carries more cargo more pax and thereby increase the turnover of the airport in terms of people served and there by boost capacity.


At the same time charge should be variable depending upon the time of the day. Ie planes landing and taking off at peak hours should be charged higher congestion charges than planes landing at non peak period.


On a personal level airlines are themselves responsible for the congestion in this air. If such an explosive growth in various sectors is taking place it makes sense to use widebody jets on domestic routes as Japan does...


open to discussion and ammendments


so guys lets discuss this...


 



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IMO, the airlines today are really down to 'nickel and dime' (chindi-chor in eq. bollywoodspeak) syndrome that seems to have afflicted the US domestic carriers.


There is some merit in the argument that promotion of ridiculous fares and schemes like 1Re or 99Re has lead to a sudden interest and thereby, surge in traffic numbers.


But airlines will have to find other ways of managing revenue/yields. One option could be the use of widebodies and reduce frequencies on key routes-(my debut post) but it seems people are interested in frequencies as well. I think the market is still in a bit of a churn and maybe it will be a couple of years atleast before trends of any signifance can be obtained.


In the meanwhile, the bean counters are trying to plug the small cracks while leaving gaping holes elsewhere.( like paying huge salaries to expat pilots and expanding into new routes almost every other day).


And now here is a question-if the airlines expect pax to pay for congestion as a regular charge, pax should be able to request compensation for all kinds of reasons!! This is not going to work in the long run.


SSB


 



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couple of observation from the discussion..


Vabby, wouldn't it be wrong to compare cars with plans.  Whereas car is a personal vehicle, plane is a public transport.  Could you apply your research to taxi, and then compare it with planes.  Is it possible to do that?


ssbmat, you've raised an interesting aspect about domestic carriers using widebodies instead.  Agreed frequencies are needed, but not round the clock.  AFAIK, frequencies are of greater importance during morning and evening rush hours.  How about likes of AD and SG using next bigger aircraft e.g. B757/762 on afternoon flights.  On the flip side, if you are using a widebody during the day, then where to you park it during evening rush hour?  Or maybe find alternate ways to use it. 


Of if widebodies generate greater revenue/seat, then LCC can contemplate using them on trunk routes during rush hours.  There maybe some who won't mind taking a conveniently timed widebody flight.  Carrying forward, is there a possibility of code-sharing between LCCs in India.  Say if AD and SG depart from DEL to MAA at close interval, then either of them operate a widebody instead of both flying a narrowbody.


rgds


VT-ASJ



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The airlines should be free to charge whatever fare they wish to. All the components of the fare must be added up and displayed as fare payble. Nothing should be hidden from the customer.

By all means, have all the surcharges and taxes but display the total sum on the website so that the customer knows exactly what is to be paid and does not get a shock after completing the process.

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Just to add the airline point of view!


 


http://www.dnaindia.com/report.asp?NewsID=1067270
One minute landing delay = Rs 2,500 loss


Praveena Sharma
Friday, December 01, 2006  23:57 IST


Airlines lose Rs 135 cr a month just because India is not equipped for the air traffic boom
 
BANGALORE: Every minute an aircraft hovers over an airport, waiting in an air-queue to land, the airline it belongs to loses Rs 2,500.
 
That is if the aircraft is a Boeing or an Airbus. If it’s an ATR, the cost is about Rs 750 a minute.
 
The collective fleet of various Indian carriers today stands at 1,200 aircraft.
 
Half of them have to circle above airports for an average 30 minutes every day.
 
That is a loss of Rs 135 crore per month for the airline industry - for no fault of theirs.
 
The daily losses on account of airport jams are, by conservative estimates, pegged around Rs 5 crore.
 
But it is not just higher jet fuel costs that have hit the airlines.
 
Air clogs also bulk up personnel costs because airlines shell out overtime money to pilots and cabin crew.
 
It also squeezes their cargo revenues. This is because airlines are forced to carry more fuel - about 30 to 40% more since.  This, in turn, increases the weight of aircraft, which automatically limits the cargo that an aircraft can carry.
 
“We usually fill five tonnes of aviation turbine fuel (ATF), but due to congestion, we now fill around 7-7.5 tonne of fuel. Due to this increased load, the engine uses more fuel. This also forces us to reduce the cargo onboard,” informs a SpiceJet Ltd executive.
 
An Air Deccan spokeswoman complained the congestion also led to lower levels of aircraft utilisation.
 
And such operational inefficiencies were indirectly impacting the bottomline of the airline operators.
 
With so much at stake, even the biggest price warrior Air Deccan, which usually shies away from any sort of price hike, is considering to levy a congestion surcharge (around Rs 150 per passenger) on the passenger, along other players such as Jet Airways, Kingfisher Airlines, SpiceJet, Air Sahara, Indian Airlines and Go Air. 
 
“We are looking at imposing it. When and how has not yet been decided. Just today, our Bangalore-Delhi flight was hovering for around 55 minutes near the airport. The additional cost that we are incurring due to congestion is hurting bad  We have to recover this cost or else it will adversely impact profits,” says Air Deccan managing director G R Gopinath.
 
Analysts are viewing the levy as pricing action, which was long overdue.
 
“That even the low-cost carriers are mandating the levy shows that losses due to congestion must have hit them very hard,” says an analyst.
 
A Mumbai-based analyst with a foreign brokerage said the total surcharge of Rs 900 (including Rs 750 for fuel and Rs 150 for congestion) has ensured that the airlines earn Re 1 per kilometre irrespective of what promotional fares they offer.
 
“This way, they have indirectly fixed a floor price for all airlines. This is expected prop up their bottomline to some extent and improve the health of the aviation industry a touch.”
 
The bad news is, congestion and delays will remain of epidemic proportions in the foreseeable future, if passenger traffic - and by therefore, flight traffic - is anything to go by.
 
Taka a look at the statistics: Last year, 16.2 million people flew from and into the New Delhi airport. This year, 20 million already had by October.
 
Passenger growth at airports are rising at around 20% a year. Meaning, the number of passengers flying in or out doubles in less than four years.
 
And in under four years, the new New Delhi airport will be ready (by late 2010). It will have a capacity to handle 37 million passengers per annum.
 
Considering the current growth rate, the new airport will be stretched at the seams at take off point itself.



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 Aseem agreed that airplanes are more of a public transport. But then with Indian Govt which has gone for complete deregulation of civil aviation sector, calling various private airlines as a public transport is hard to digest sheer because  of profitability.


 Though none of Pvt operaters have been in black this fiscal or last fiscal but the ultimate aim is of maximising profits while public transport is always operated for the benifit of the consumers and the society with no profit to be reported in balance sheets or an agreed amount of profit.


 If any of us have read a bit of transport planning and economics we would know that adding capacity is the worst possible solution which a planner can suggest to curb congestion because the moment extra capacity is created it acts as a bait to airline operaters to moot extra flights where demand is not an issue


I had done  research on airport noise ie noise emitted by planes landing and taking off frm airports. Though noise is not an issue in India at present congestion has become a problem. Airport congestion then simply make airport slots as valuable assets. If the airport authorities introduce dynamic slot pricing this wud also help in mitigating congestion during the peak hour and thr traffic can be spread during the day.


We wud have to give a fiver to the airbus and boeings marketing dept who have been able to sell their single aisle family aircrafts so much successfully. Each time when we open newspapers we read news about the  future demand of aircrafts though no one talks about how these figures can be trimmed to so much low levels if widebody jets are deployed.


Hence whatever congestion is happening in the skies its the airlines who are partly to be blamed along with the goverment. They could have rather gone for competetive tendering on the differents routes rather than full scale deregulation



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karatecatman wrote:



Just to add the airline point of view!


 


http://www.dnaindia.com/report.asp?NewsID=1067270
One minute landing delay = Rs 2,500 loss


Praveena Sharma
Friday, December 01, 2006  23:57 IST


Airlines lose Rs 135 cr a month just because India is not equipped for the air traffic boom
 
BANGALORE: Every minute an aircraft hovers over an airport, waiting in an air-queue to land, the airline it belongs to loses Rs 2,500.
 
That is if the aircraft is a Boeing or an Airbus. If it’s an ATR, the cost is about Rs 750 a minute.
 
The collective fleet of various Indian carriers today stands at 1,200 aircraft.
 



1200 commercial aircrafts??? Obviously DNAIndia have got their facts wrong!! as aviation journalists usually ALWAYS DO!


Maybe that is the collective size of all registered planes in India including the Pipers cubs and moths ?


?


 



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One misconception that i can find here is about wide bodies and the frequencies of flights.


Routes to places of tourist interest like GOI can have wide bodies deployed instead of more frequencies. But on routes like BOM-DEL or DEL-MAA or BLR-MAA etc etc people who travel most of them are on business and official work. in such cases people prefer a larger number of frequencies. Thats because they have a better option like for eg a businessman takes the 8.30AM flight to DEL completes his work and return by around 7.30PM.


If here there was a shortage of frequencies like even if it was a B777 at a frequency of 3hr it would definately affect the person's schedule considering the fact that there was no flight at 8.30AM and 7.30PM.


One example is that BKK-Phuket route on which TG deployes a 747. This is solely because the majority people are for tourism and the airline will definately consider the majority. Now TG gets an advantage to use a wide body and reduce operation costs of rather than flying 2x 737s or for tha fact any narrow body.


now in routes like JFK-LAX many US Airlines use aircrafts like 757 or 767. this is because the load factor might be higher (dah!!! beat the statistics) and also for the fact the distance is too much it is definately economical to use a wide body.


QF on the other hand uses A330s in domestic routes too. Again reason being that QF being a big airline for a country like Australia with very less options other than Virgin Blue, Jet* etc. So QF can manage that.


Comments welcome



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ssbmat wrote:



karatecatman wrote:



Just to add the airline point of view!


 


http://www.dnaindia.com/report.asp?NewsID=1067270
One minute landing delay = Rs 2,500 loss


Praveena Sharma
Friday, December 01, 2006  23:57 IST


Airlines lose Rs 135 cr a month just because India is not equipped for the air traffic boom
 
BANGALORE: Every minute an aircraft hovers over an airport, waiting in an air-queue to land, the airline it belongs to loses Rs 2,500.
 
That is if the aircraft is a Boeing or an Airbus. If it’s an ATR, the cost is about Rs 750 a minute.
 
The collective fleet of various Indian carriers today stands at 1,200 aircraft.
 



1200 commercial aircrafts??? Obviously DNAIndia have got their facts wrong!! as aviation journalists usually ALWAYS DO!


Maybe that is the collective size of all registered planes in India including the Pipers cubs and moths ?


?


 




Actually they must have wanted to include all the aircrafts since 1947

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the_380 wrote:



One misconception that i can find here is about wide bodies and the frequencies of flights.


Routes to places of tourist interest like GOI can have wide bodies deployed instead of more frequencies. But on routes like BOM-DEL or DEL-MAA or BLR-MAA etc etc people who travel most of them are on business and official work. in such cases people prefer a larger number of frequencies. Thats because they have a better option like for eg a businessman takes the 8.30AM flight to DEL completes his work and return by around 7.30PM.


If here there was a shortage of frequencies like even if it was a B777 at a frequency of 3hr it would definately affect the person's schedule considering the fact that there was no flight at 8.30AM and 7.30PM.


One example is that BKK-Phuket route on which TG deployes a 747. This is solely because the majority people are for tourism and the airline will definately consider the majority. Now TG gets an advantage to use a wide body and reduce operation costs of rather than flying 2x 737s or for tha fact any narrow body.


now in routes like JFK-LAX many US Airlines use aircrafts like 757 or 767. this is because the load factor might be higher (dah!!! beat the statistics) and also for the fact the distance is too much it is definately economical to use a wide body.


QF on the other hand uses A330s in domestic routes too. Again reason being that QF being a big airline for a country like Australia with very less options other than Virgin Blue, Jet* etc. So QF can manage that.


Comments welcome






Some comments/questions on the above


The JFK/LAX routes may not suit an appropriate comparison. These routes (nonstops) are dominated by DL,UA and AA using 757s/767s , and they earn most of their income by charging super-premium on the F/J classes. These are true businessmen flights. None of the Indian routes have such features (in terms of distance and pax categories).


I think the models that suit India for closer comparison are the Australian domestic or Japan domestic sectors.


I have a feeling here that the India metro sector market may eventually resemble the Japan domestic sector, where two Very Large carriers (JAL and ANA) dominate the Tokyo-Osaka-Nagoya routes, with special high-density widebody planes.


On a related but slightly offkey note, I bet the small LCCs like GoAir, IndiGo etc must be quite quite worried about holding on to the meagre market share.


These airlines are so similar to each other in product features ,how will they be able to compete DN which has a bigger market spread ?


 


 



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Old wine new bottle....


They want the money in ur pocket....so they will get it on some pretext or the other.


IMHO, i feel that the airlines should bear this cost as it is they who have jumped into this business, looking at lucid and lucarative returns.



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I have no idea about Japan...


but as far as LCCs are concerned... they are quite new into the market...9W,S2 and IC have been playing for quite some time.


LCCs will need some time to grow... but i feel only the ones which are good will survive...


my list here includes 9W, SG and G8... (IC and AI are immortal unless govt murders them)



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No bets on IT



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The only part that is left is to have a conductor on board, who collects the fare as per the delay


I wonder if airlines will return money if the flight lands on time without any delay.



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Boeing7xx wrote:


I wonder if airlines will return money if the flight lands on time without any delay.



A good point... in that case airlines pocket the money as profits X-(



-- Edited by the_380 at 16:58, 2006-12-03

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the_380 wrote:



One example is that BKK-Phuket route on which TG deployes a 747. This is solely because the majority people are for tourism and the airline will definately consider the majority. Now TG gets an advantage to use a wide body and reduce operation costs of rather than flying 2x 737s or for tha fact any narrow body.





Bad example, every man and his dog with a urge to shag at the lowest cost is on that flt. Phuket as the name suggest is the worlds PHUKET KA PHATKA you only pay to get there. The only other place to use a B747 on a similar sector is JAPAN where the revenue (tik price is high for a comparitive mode of transport) is comparitively very high.


IMHO the airlines in INDIA have kicked a sleeping dog, the Indian psyche is to hammer the upperDog ( is this word in the dict ?), the media and subsequently the politicians will take this up. Except for DN every other airline in INDIA is owned by a self confessed prince or Brat, expect the fireworks in the press soon as the media co end up paying higher fares this Q. Probably this could be one of the ploys of the newly formed Airlines CEO Forum to shift the Onus onto the GOI.



-- Edited by tayara mechanici at 22:34, 2006-12-06

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 Well then wat should be the exact solution ie how to tackle  congestion subject to one constraint ie expansion of airport facility is not an option so whats the way foward??


 Btw i guess someone is really reading our forum. PP has vented his spleen against the airlines for collecting more cash frm pax on pretext of congestion charge and i guess IC seems to be following the line of the aviation minister



-- Edited by VABBy at 22:00, 2006-12-06

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Raise the Aeronautical Charges during peak hrs to the Metros, let the market forces pay the fares..........see the pax move back to Trains for the overnight journey on the Rajdhani Exp and consequent easing of congestion, Not.


The only solution is to allow all the airlines to fly Intl. They will route their aircrafts to DEL/BOM/MAA/BLR from the non-Metros and off to a 2-3hr Intl Leg for a return back in the afternoon. Most flts to ME are avg 3hrs from DEL/BOM and other W-India Cities. The same to SE-ASIA from MAA/BLR and the E-Indian cities. Right now quite evidently all the airlines are deploying their capacity onto the trunk routes in the abscence sufficient routes to sustain the aircraft acquisition. Bear in mind most of the airlines have on an avg a 7yr lease contract for the a/c they started ops with, and canot return it early without attracting huge penalties. Add to this the avg 4-5 a/c joining the fleet of  Dom Indian Airlines every month. Now every aircraft that is idle is flogged onto the Metros throughout the day consequently lowering fares to ridiculous levels and blocking the skies over these 2 Metros.  The option of flying to DXB, AUH, DOH, SHJ, BAH, MCT, Al-Ain, BKK, KUL, Johar Bahru, Tehran, SIN, Phuket will create inumerable number of city pairs between the Metros/Non-Metros and these cities in ME & SE-ASIA. I don't see the point in airlines from these countries mounting WB  flts to over a dozen Indian cities without AI/IA exploiting the same potential. AI / IA can deploy their new eqpt to create a market in China with P2P from the Indian Metros, in addition to their existing network to these dest. The anti-competitive rather shackling law of graduating to Intl flying after 5yrs of Domestic service is absolutely absurd especially in light of all the issues affecting the Indian Aviation.  More P2P to the ME from various Indian cities will mount a good challenge to the airlines from ME. I am sure there will be a straight 25% - 40% drop in flts between DEL-BOM vv. Praful doen't have to search hard for inspiration. Following 9/11 and the subsequent shakeout in the USA dom market most of the majors started deploying their excess eqpt onto Med-long haul Intl routes to S-America and EU, consequently creating new Long thin P2P. One rule will clear most of the problems facing aviation in India.  


With a stagger you'll see plenty of flts move through these Intl hubs throughout the day, consequently feeding into IC/AI/9W/KF intl services as well as increasing the parking utilisation in the non-metros. With better connectivity between non-metros and DEL/BOM/MAA/BLR, businesses will be attracted to move to the economical less costly and socially sane non-metros to open shop. Further boosting the growth of these cities. Especially ITES and Tech co will be encouraged towards these cities with reputed educational institutes.


Example:-


Daily 2 dep 1 each to DEL/BOM/BLR/MAA before 6am from Raipur/Bhubneshwar/Vishakpatnam/Baroda/Coimbatore/NGP/GOI with onward Intl connections will unclog the skies and create better connectivity, revenue, yield, a/c utilisation & profits..............and they all lived happily ever after.



-- Edited by tayara mechanici at 03:09, 2006-12-07

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Airlines may seek cut in airport charges

From: DNA India



Carriers prepare to drive a hard bargain using congestion charge.

BANGALORE: Airlines and civil aviation minister Praful Patel are headed for a face-off over the recently introduced congestion surcharge of Rs 150 per passenger.

If industry insiders are to be believed, airlines, which are in no mood to relent to Patel’s request to rollback the levy, may use the opportunity to negotiate for a cut in the landing, parking and navigational charges at major airports.

“The industry had known from the very beginning that this charge would not be accepted but mounting losses forced it to take a chance. Now that the minister has opposed it, airlines will bargain for some relief on airport charges before pulling it back,” said an industry source.

The recent formation of Federation of Indian Airlines (FIA), an industry body, it will be easier for the carriers put collective pressure on the minister.

Domestic carriers have justified the surcharge saying that airports snarls have bumped up their costs because of the higher fuel burn.

“For no fault of ours, we are burdened with this additional cost. If the government cannot do anything to mitigate it, it cannot advise to remove the charge either,” said a miffed industry leader.
...
The spat with Praful Patel offers a window of opportunity for the airlines

They are likely to seek a cut in landing, parking and navigational charges at major airports

The recent formation of Federation of Indian Airlines affords carriers a unified front to put pressure on Patel



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Any details/link to the FIA.


Also who was this Industry leader being qouted.


regds
MEL



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