Monday, November 21, 2011

Cessna 207, N91099: Accident occurred August 13, 2011 in McGrath, Alaska

NTSB Identification: ANC11FA077 
 Nonscheduled 14 CFR Part 135: Air Taxi & Commuter
Accident occurred Saturday, August 13, 2011 in McGrath, AK
Aircraft: CESSNA 207, registration: N91099
Injuries: 2 Fatal,4 Serious.

This is preliminary information, subject to change, and may contain errors. Any errors in this report will be corrected when the final report has been completed. NTSB investigators either traveled in support of this investigation or conducted a significant amount of investigative work without any travel, and used data obtained from various sources to prepare this aircraft accident report.

On August 13, 2011, about 1940 Alaska daylight time (ADT), a Cessna 207 airplane, N91099, impacted mountainous, brush-covered terrain, about 37 miles west of McGrath, Alaska. Of the six people aboard, the pilot and one passenger died at the scene, and four passengers received serious injuries. The airplane sustained substantial damage. The flight was operated by Inland Aviation Services, Inc., Aniak, Alaska, as a 14 CFR Part 135 visual flight rules (VFR) on-demand charter flight when the accident occurred. Visual meteorological conditions prevailed at the airplane's point of departure, and instrument meteorological conditions were reported along the airplane's flight route. The flight originated at the McGrath Airport, about 1920, and was en route to the Anvik Airport, Anvik, Alaska, before continuing on to Aniak, the airplane's home base. VFR company flight following procedures were in effect.

During a hospital room interview with the National Transportation Safety Board (NTSB) investigator-in-charge (IIC), on August 16, a passenger related that the purpose of the flight was to transport a group of school teachers to Anvik before the start of the school year. His wife and two children were also aboard the accident airplane.

The passenger stated that he was seated in the front, right seat, next to the pilot. He said that about 20 minutes after leaving McGrath, as the flight progressed into mountainous terrain, low clouds, rain and fog restricted visibility. At one point the pilot told the passenger, in part: "This is getting pretty bad." The passenger said that the pilot then descended and flew the airplane very close to the ground, then climbed the airplane, and then it descended again. Moments later the passenger said that the airplane entered "whiteout conditions." The next thing the passenger recalled was looking out the front windscreen, and just before impact, seeing the mountainside suddenly appear out of the fog. He said that all of the survivors lost consciousness during the impact, and he was the first to regain consciousness.

The passenger noted that while boarding the airplane in McGrath, he happened to notice a SPOT satellite personal tracker that was clipped to the pilot's sun visor. He said that after the accident, he was able to find the SPOT device in the wreckage, and began pushing the emergency SOS button.

According to the operator, the pilot routinely carried his own SPOT satellite personal tracker. About 2030, family members in Wasilla, Alaska, the pilot's hometown, received an emergency SOS message from the pilot's SPOT device. A family member then immediately called the operator in Aniak to alert them of the distress message.

When the airplane failed to arrive in Aniak by 2045, company personnel initiated a phone and radio search to see if the airplane had diverted to another village. Unable to locate the airplane, company personnel initiated an aerial search along the pilot's anticipated route, but poor weather and dark night conditions prohibited a search of the entire flight route.

The Federal Aviation Administration (FAA) issued an alert notice (ALNOT) at 2200 Alaska daylight time.

Rescue personnel aboard an Air National Guard C-130 airplane tracked an analog, 121 MHz ELT signal to an area of mountainous terrain, but poor weather prohibited searchers from reaching the site until the next morning. The four seriously injured passengers remained at the accident site overnight.

The following morning, an HH-60G helicopter from the Air National Guard's 210th Air Rescue Squadron, Anchorage, Alaska evacuated all personnel from the accident site.

On August 14, the NTSB IIC, along with two Alaska State Troopers, and an FAA operations inspector from the Anchorage Flight Standards District Office (FSDO), examined the airplane wreckage at the accident site, and no preaccident mechanical problems were found.

The airplane was not equipped with, nor required to be equipped with, a digital, 406 MHz ELT that instantly transmits a distress signal to search and rescue satellites, thereby alerting rescue personnel within minutes of the location of the crash. As of February 1, 2009, analog, 121.5 MHz ELT's stopped being monitored by search and rescue satellites, and the installation of the 406 MHz has been voluntary.

The closest weather reporting facility was the McGrath Airport, 37 miles west of the accident site. At 1853, a weather observation from the McGrath Airport was reporting, in part: Wind, variable at 4 knots; visibility, 10 statute miles; clouds and sky condition, 2,800 few, 4,900 broken, 5,500 feet overcast; temperature, 57 degrees F; dew point, 50 degrees F; altimeter, 29.88 inches Hg.

A McGrath plane crash's survivors shared an amazing family story of survival and recovery Saturday at St. Elias Specialty Hospital's third annual patient reunion.

Flying high: Emirates business grows 22% in country

DUBAI:  Honeymoons in Mauritius and shopping trips in Dubai are becoming more common as Pakistani passengers flying to other countries through Emirates grew by 22% last year, said a top official of the airline in an interview to a group of Pakistani journalists.

The country’s middle class grew considerably in the last two years along with its disposable income, said Emirates Senior Vice President Commercial Operations West Asia and Indian Ocean Sheikh Majid Al Mualla.

With this growing market at its reach, Emirates Airline – one of the largest operators in Pakistan – is looking to expand its operations, said Mualla.

The airline that witnessed a double-digit growth in recent years in Pakistan plans to double its operations from Peshawar, added Mualla. The city is an attractive destination as it includes people from Pakistan and across the border from Afghanistan, where the carrier does not operate. The company recently increased flights from Lahore and Islamabad to seven times a week and three weekly flights from Peshawar.

The company currently operates 45 flights to Pakistan with an average of 82% seats booked in each flight, much more than the industry’s average of around 60% to 62%, said Mualla. The world’s third largest airline fleet-wise has requested the Civil Aviation Authority for more flights from the country, said Mualla, adding that it has the capability to run even 100 flights.

Flights to Saudi Arabia grew the most by 93% followed by Qatar and the US with 53% and 35%, respectively, on a yearly basis.

The fast-growing airline last week placed the single largest commercial plane order in Boeing’s history of 50 Boeing 777s worth $18 billion, which took their aircraft shopping list tally to 239 worth more than $84 billion.

Finance for these orders will not be an issue, said Mualla, adding that Islamic bonds and foreign investors are few of the options the airline is looking into.

The airline is expected to become the world’s largest in the next five years if it grows at its current pace. The company is facing resistance from some countries in expanding routes, however, Mualla is positive that negotiations will end by increasing its wings.

The Dubai-based carrier’s net profit plummeted 76% to Dh827 million for the six months to September 30 from Dh3.39 billion in the same period last year. Mualla cited oil prices as the major factor for the drop in profits.

“A one dollar increase in oil prices causes a $1 billion impact on the entire aviation industry,” said Mualla in an earlier interview with The Express Tribune.

Competition from other airlines of the UAE did not seem to be a problem for Emirates as Mualla said they are always one step ahead.

“Competition is good for customers of the industry as the service standard improves and prices fall,” he said.

Michigan State Police helicopter: Should cops have used a copter to search for man fleeing casino?

Michigan State Police patrolling the skies over metro Detroit.

WAYLAND -- Some Mlive commenters seem incredulous that police on Friday used a Michigan State Police helicopter to help search for a drunken and disorderly man who clashed with security at the Gun Lake Casino, then fled into the woods when police arrived.

Anonymous wrote: "Talk about a misallocation of resources. Are the police so desperate to nab some unruley casino patrons? If they would have left enough alone the men would have come back in when they were cold enough. Use some common sense!"

And we also heard from michigan-pride: "The tab for the helicopter better be showing up on this guy's bill at his sentencing, hopefully the press can follow what his punishment ends up as."

Police say several factors led them to launch the helicopter in search of the suspect, and all of them were tied to the suspect's welfare: 

While two men initially fled the casino and could be heard by police crashing through the woods, an Allegan County K-9 team did locate one man about two hours after the 7:45 p.m. incident began. That man said he'd lost contact with the other man -- his brother -- and that his brother had lost a shoe and cell phone during their run into the woods.

Given that police were unable to locate the second man, and that they knew he was wearing light clothing, was reportedly intoxicated and had lost a shoe, police took into account the cold weather and decided to request the helicopter began searching for the missing man.

The man later made his way out onto a nearby road, where he was taken into custody about 12:15 a.m. Saturday.

Both brothers, from Holland, were jailed and have been released on bond.

Airport runway conditions call for closure. Lubbock Preston Smith International Airport (KLBB), Lubbock, Texas

Concrete damage on airport runways will lead to closure causing delays and cancelations for those traveling.

There are two runways at Lubbock's airport. One runs north to south and the other east to west.

"Concrete has a life, typically around 25-30 years. James Loomis, Aviations Director said. “Some of that concrete out there is older than that."

Old concrete eventually needs to be replaced and that is the case for parts of the east-west runway. Loomis said that runway will be closed starting next week for reconstruction work.

"The contractor has 200 days to complete that project,” Loomis said. “That will take us through August of next year. We're hoping that they finish sooner."

During the work phase, only the north-south runway will remain open for commercial flights.

"There will be some days, most likely or maybe not, where we will have tenuous operations with wind," Loomis said.

He said closing the east-west runway is unavoidable in order to rebuild it.

"If the winds are such that we can't use the north-south runway, then we'll be out of commission during that time period," Loomis said.

Delays or cancellations may occur when extremely high winds make takeoffs or landings unsafe.

"We advise all people who are flying out of any airport, not just our airport, to contact their airlines to find out the status of their flight," Loomis said.

He said the north-south runway is next for repairs. It's the primary runway, and closing it down poses much greater potential for wind related delays.

Universal Motion Simulator: real enough to evoke panic

A fighter sim just isn't realistic unless it makes you throw up and scream for your mother, which is why the sadistic folks at Australia's Deakin University created the Universal Motion Simulator. It's a barebones cockpit attached to the end of a seven-meter robotic arm that can pull up to six Gs -- indeed it's uncomfortable enough to mimic external disturbances, mechanical failures and crash scenarios as well as normal flying. The system also monitors a pilot's brainwaves, pulse and other bodily functions to discover if they have necessary nerve. Check out the video after the break and then imagine combining it with a 360-degree viewing dome for utter perfection.

Aircraft owners group spent $810,000 on lobbying

The Aircraft Owners and Pilots Association spent $810,000 in the third quarter to lobby the federal government on a legislation regarding airport infrastructure and the Federal Aviation Administration's budget, according to a disclosure report.

That's up 19 percent from the $680,000 the group spent a year earlier and 11 percent from the $730,000 it spent in the second quarter this year.

The general aviation trade group also lobbied the federal government on legislation that would allow more private planes to use Ronald Reagan Washington National Airport, create penalties for aiming laser pointers at airplanes and establish a new air traffic control system.

The group also lobbied the Transportation Security Administration, Department of Homeland Security, the FAA, Environmental Protection Agency, Department of Transportation and the Federal Communications Commission, according to the report the group filed Oct. 19 with the House clerk's office.

Ohio: Explosion causes fire at GE Aviation.

EVENDALE – Firefighters quickly extinguished a blaze at GE Aviation following an explosion in a building that houses machinery that tests aviation parts.

No one was hurt in the two-alarm fire that was reported between 4:30 p.m. and 5 p.m. Monday at the plant along Interstate 75, officials said.

Evendale Fire Chief Rick Cruse said it probably will take awhile to figure out what caused the blast inside Building 300 at the north end of GE’s plant here. Two of the four walls were blown out of the building, which sits at the north end of GE’s property; no damage estimate was immediately available.

Three large hydraulic compressors are housed in the building, which is used for “strictly mechanical” purposes, Cruse said. Computers, not people, run all the components there, he said.

Firefighters were able to contain a leak of hydraulic fluid, Cruse said. Jet fuel, natural gas, water and electricity supplies were turned off in the area, Cruse said, adding that GE “is real conscientious about everything.”

GE spokesman Rick Kennedy said employees rarely occupy that area, and all buildings nearby are used to test aviation parts.

After the fire broke out, interstate was clogged alongside the plant because of rainy weather, rush-hour traffic and multiple fire trucks converging on the scene; some fire crews were advised to find an alternate route to reach the plant.

Evendale firefighters were able to extinguish the fire so rapidly, they didn’t need the extra help that poured in from neighboring departments, Cruse said. Firefighters from nine departments with 50 firefighters arrived to help but Evendale fire officials released most of those firefighters because they weren’t needed, Cruse said.

GE maintains its own fire department but Cruse was unsure whether GE firefighters were the first to fight the fire, Cruse said. GE’s fire alarm system functioned properly, he said.

By 5:15 p.m., all the fire “except along the roof line,” was out, firefighters said via the emergency radio system.

Around 5:35 p.m., firefighters said a GE structural engineer was summoned to examine the building to make sure the structure was not going to collapse.

By 6 p.m., fire operations appeared to be winding down. About a half-dozen fire trucks remained on the scene, but half of them were positioned away from the explosion site. Two firefighters were hoisted up on a ladder truck’s bucket to continue monitoring the scene.

The federal Occupational Safety and Health Administration likely will be conducting its own probe to ensure that safety procedures were followed, Cruse said.

Enquirer employee Robin Buchanan and photographer Amanda Davidson contributed to this story.

Congressmen want review of Ontario International Airport's (KONT) sharp decline

Two California congressmen Monday urged U.S. Transportation Secretary Ray LaHood to have the Federal Aviation Administration take action to reverse the severe decline at L.A.-Ontario International Airport.

Reps. Jerry Lewis (R-Redlands) and Ken Calvert (R-Riverside) also wrote to Los Angeles Mayor Antonio Villaraigosa, demanding that Los Angeles World Airports, which operates Ontario, take immediate steps to either improve business at the airport or turn over control to Inland Empire officials.

“We strongly urge the Department of Transportation to closely examine Los Angeles World Airport’s governance of Ontario International Airport,” the congressmen wrote to LaHood. “Without action, we are precariously close to losing the airport, a vital component to the economic health of San Bernardino and Riverside counties.”

Ontario had been one of the fastest-growing regional airports in the nation. Now, it is one of the fastest declining, having lost a third of its passengers since 2007. Flights have been reduced by 47% and destinations by 60%.

Lewis and Calvert said that by turning its focus almost entirely on LAX at the expense of Ontario operations, Los Angeles World Airports is seriously undermining a plan to spread air traffic throughout the region.

They added that Ontario needs to be under local control - -either the city of Ontario or an Inland Empire airport authority -- to ensure that the operator is focused soley on the success of the airport.

Tihart: Keeping Boeing will be a challenge

(WICHITA, Kan.)—

Former Congressman and current Republican Committeeman, Todd Tiahrt, says it’s going to be tough to keep the Wichita facility. He spoke live with Eyewitness News anchor Roger Cornish about Boeing’s announcement Monday.

The aviation company released a statement saying it’s studying the future of the facility in Wichita. Tihart says the cost of government is going up which puts the Wichita plant at risk. He says while this isn’t the first time Boeing has studied the feasibility of Wichita, the economic climate make it more risky. Boeing Wichita only does defense work for the government.

Kansas Governor Sam Brownback and all six members of the Kansas Delegation - Senator Pat Roberts, Senator Jerry Moran, Rep. Lynn Jenkins, Rep. Mike Pompeo, Rep. Tim Huelskamp and Rep. Kevin Yoder - released the following statement saying in part:

“Boeing has promised publicly and repeatedly in writing that the success in winning the tanker contract would mean ‘7,500 jobs’ in Kansas, including several hundred jobs at Boeing-Wichita for the Tanker Finishing Center. We expect the company to honor that commitment.”

Congressman Mike Pompeo was in the KWCH studios when the announcement was released. We asked him for a response but he left without commenting, referring us to the joint statement released by the governor's office.

Tihart says there’s little Brownback and the others can do to keep Boeing. He says other states offer more competitive wages and economic development incentives. He says a key to keeping Boeing here will be the employees. He says contracts will have to be reviewed and employees will have possibly take lower wages. Tihart says Kansas has very little wiggle room if Boeing chooses to leave.

Boeing says it hopes to have the study completed by the end of this year or early 2012.

Boeing looking at the possibility of leaving Kansas

(WICHITA, Kan.)—

Boeing is studying whether to leave Wichita. The company employs 2,100 people mostly at its defense facility.

A spokesman for Boeing released the following statement Monday afternoon:

“Boeing is studying the future of its Wichita, Kan., facility as part of an initiative to address the current defense budget environment,” said spokesman Jarrod Barlett. “The Wichita facility faces pressures because of product and services contracts that have matured and expired, and limited prospects for future work. We are in the process of engaging key stakeholders — including customers, government officials and union representatives — to share this information as we continue to have open and candid discussions about the challenges we face in the current budget and economic environment.

Among the options being reviewed is the potential closure of the Wichita site,” Bartlett continued. “Because of defense budget pressures, we are conducting a number of market studies to determine how to best preserve and grow our business, and continue to provide quality and cost-efficient services for our customers. We anticipate completion of the Wichita study by the end of the year or in early 2012.”

Boeing has a defense facility in Wichita. It doesn't do any commercial work. The facility maintains and modifies existing aircraft. It currently employs 2,100 people.

Kansas Governor Sam Brownback along with members of the Kansas Congressional Delegation released the following statement regarding a performance study being conducted by Boeing of its Wichita facility:

“The Boeing Company has a rich history in Kansas, and the state and Congressional delegations have been strong supporters of this successful partnership throughout the last 80 years. No one fought harder for Boeing’s win of the U.S. Air Force tanker competition during the last decade than the Kansas delegation and our teamwork paid off.

Boeing has promised publicly and repeatedly in writing that the success in winning the tanker contract would mean ‘7,500 jobs’ in Kansas, including several hundred jobs at Boeing-Wichita for the Tanker Finishing Center. We expect the company to honor that commitment.

Kansans are the right team with the right tools to make Boeing’s continued operations a success for many years to come.”

'Spicy' Sailors Busted for Using Synthetic Marijuana. Navy to Expel 28 Sailors for Illegal Drug Use.

Spice: It's Not Worth It

The Navy announced Monday that it plans to kick out 28 sailors assigned to the aircraft carrier Ronald Reagan for using a synthetic drug called Spice that mimics marijuana.

The announcement comes only a month after a similar investigation into illegal drug use led to the dismissal of 64 other sailors — also from the San Diego-based U.S. Third Fleet, which includes the Reagan.

Some of the 64 were assigned to the Carl Vinson, the carrier from which Osama bin Laden was buried at sea.

The 28 sailors were part of six probes conducted by the Navy in the past month.

The Navy has banned the use of fake pot, and officials have been aggressively investigating its use among sailors.

The drug is a mixture of herbs and chemicals that mimic the active ingredient in marijuana but with side effects that can include headaches, seizures, numbness or paralysis.

The Navy has spent the past year and a half battling the spread of the new designer drug, which at first was legal and couldn’t be detected by commonly used drug tests. Recently, the military announced it had the ability to test for a limited number of these substances.

Spice first appeared in Europe before being introduced in the United States. The U.S. Drug Enforcement Administration named it as a controlled substance on March 1 in an emergency action, therefore making it illegal for over-the-counter sales.

The DEA says the fake pot is typically sprayed on plant material that is meant to be smoked. It had been sold in small packets over the Internet and in tobacco and smoke shops, drug paraphernalia shops, gas stations and convenience stores as herbal incense.

Concern over Spice in the military has been growing.

The Marine Corps banned it in September 2008. In July 2009, 15 sailors aboard aircraft carrier George Washington were discharged for taking Spice, leading to a Navy-wide ban on the drug in March 2010.

In January, seven students were discharged from the U.S. Naval Academy because of Spice use.

Cessna 208B Grand Caravan, Makalu Air, 9N-AJM: Accident occurred November 21, 2011 at Talcha Airport - VNT1 in Mugu district, Nepal

Kathmandu, Nov 21 (PTI) All 12 people on board a passenger aircraft had a miraculous escape today as it crash landed in western Nepal setting off a small fire in the cockpit.

The 10 passengers including a child in the Cessna Caravan aircraft of Makalu Airlines sustained minor injuries as the plane crash landed in the mountainous district Mugu near famous Rara lake.

Captain Pradip Jung Shah is said to be seriously injured in the incident but he and his colleague are out of danger, according to airport authorities.

The accident took place at 4.50 pm as the aircraft skidded off the Talcha Airport runway in Mugu while it was landing.

The aircraft overran the runway during landing and a small blaze erupted in the cockpit, said an airport staff.

The plane took off from Nepalgunj airport in the afternoon.

The injured people have been flown back to Nepalgunj where they will get necessary medical treatment, the airport staff said.

Earlier in September, a small plane crashed near here killing all 19 people on board, mostly foreign tourists.

MUGU, NOV 21 - A single-engine Cessna Caravan of Makalu Air suffered a minor crash at Talcha airport in Mugu district on Monday evening. The 9-NAJN aircraft skidded off the runway and hit a rock 200 metres ahead at around 4:00 pm. 

 Capt Pradip Jung Shah was seriously injured, while the co-pilot sustained a minor injury. Two of the nine passengers on board were airlifted to Kathmandu for treatment by another aircraft of the company, said Mugu Chief District Officer Surya Bahadur Khatri.

The flight was chartered from Nepalgunj to Mugu. Makalu Air, that runs chartered flights, is based in Nepalgunj. It was established in 2009.

Earlier, the airport has witnessed three plane accidents. Pilots have long been complaining about difficulties in operating flights to and from the airstrip with a narrow runway.

Ex-Cessna worker admits stealing airplane parts

WICHITA, Kan. (AP) - A former Cessna Aircraft Co. mechanic from Wichita has pleaded guilty to stealing parts from airplanes and selling them on eBay.

The U.S. Attorney's office says 34-year-old Diego Alejandro Paz-Teran pleaded guilty Monday to one count of interstate transportation of stolen property. He faces up to 10 years in federal prison at sentencing Feb. 6.

Prosecutors said the investigation began in November 2008 when an employee of Rockwell Collins Co. noticed a $45,000 airplane computer made by Collins offered on eBay for $9,000.The Rockwell Collins worker contacted the seller and requested serial numbers.

Cessna discovered the part had been removed from an XLS Plus aircraft while it was being painted. Investigators found other stolen aircraft parts being sold on the same eBay account and traced it to Paz-Teran.

Horrific Attack: Transportation Security Administration employee charged with sexual assault. Manassas, Virginia.

Credit: Prince William County police

Harold Glenn Rodman, 52, of 10598 Winfield Loop, was charged with aggravated sexual battery, object sexual penetration, forcible sodomy and abduction with intent to defile, police said.

An employee of the Transportation Security Administration was charged with sexually assaulting a woman while he was in uniform and after he showed his badge to the alleged victim, according to Prince William County police.

Harold Glenn Rodman, 52, of the 10500 block of Winfield Loop in Manassas, allegedly approached the woman on the street where he lives.

Rodman was held without bond Monday with a court date set for January, court records show. He is charged with aggravated sexual battery, object sexual penetration, forcible sodomy and abduction with intent to defile, police said.

Police said they did not know where Rodman worked for the agency or in what capacity. A TSA spokesperson was not available immediately Monday for comment.

On Sunday at about 3:25 a.m., police responded to a report of a sexual assault. Two women said they had been approached by a man they did not know, and that he assaulted one of the them before running away, police said. Police said the woman reported he had been wearing a uniform and showed a badge.

During a canvass of the neighborhood, Rodman came out of his home and matched the description given by the reported victim who is 37 and from Manassas, said police. Rodman was arrested after an investigation.

Oregon man sues Delta Airlines for $2 million, claims noisy cabin caused permanent hearing loss

An Oregon man who was flying home from the Minneapolis-St. Paul airport pleaded with a Delta Airlines flight attendant about the "extreme discomfort" he was enduring because of a loud noise during the nearly four-hour flight.

Flight staff didn't offer him ear plugs or offer to turn the plane around or make an early, unscheduled landing before reaching Portland International Airport, according to Kent J. Neilson's $2 million lawsuit filed Friday in Multnomah County Circuit Court.

Neilson temporarily lost hearing in one ear, and today suffers permanent hearing loss in both ears, according to his suit. The suit also claims he has "disabling and severely aggravating" tinnitus in both ears.

An airline spokesperson couldn't immediately be reached for comment. Neither could Neilson's Portland attorneys, Robert B. Hopkins and Matthew K. Clarke.

The complaint describes Neilson only as an Oregon man. It alleges that the noise during the April 28, 2010 flight was loudest in the area around his exit row seat, 10B. The suit alleges that as the flight neared landing, a flight attendant told Neilson that other passengers had complained about the noise on a previous flight.

European Union Bans Rollins Air of Honduras, Part of Jordan Aviation Fleet

The European Union banned Rollins Air of Honduras and part of Jordan Aviation’s fleet from flying in the 27-nation bloc while further easing curbs on TAAG Angola Airlines under the latest changes to a list of unsafe carriers.

The EU said “significant safety issues” first raised by France justified the fleet-wide prohibition on Rollins Air and “numerous and repeated safety deficiencies” by Jordan Aviation warranted a ban on three of its Boeing Co. (BA) 767 aircraft. TAAG is allowed to add two Boeing 777-300 planes to the carrier’s aircraft permitted in the EU.

“Safety comes first,” the commission, the EU’s regulatory arm, said in a statement today in Brussels. “We cannot afford any compromise in this area.”

This is the 18th update of a blacklist first drawn up by the commission in March 2006 with more than 90 airlines, mainly from Africa. The ban already covers passenger and cargo carriers from nations including the Democratic Republic of Congo, Equatorial Guinea, Gabon, Liberia, Sudan and the Philippines.

Airline crashes in 2004 and 2005 that killed hundreds of European travelers prompted EU governments to seek a uniform approach to airline safety through a common blacklist. The list, updated at least four times a year, is based on deficiencies found during checks at European airports, the use of antiquated aircraft by companies and shortcomings by non-EU airline regulators.
Safety Records

In addition to imposing an operational ban in Europe, the blacklist can act as a guide for travelers worldwide and influence safety policies in non-EU countries. Nations that are home to carriers with poor safety records can ground them to avoid being put on the EU list, while countries keen to keep out unsafe foreign airlines can use the European list as a guide for their own bans.

In its statement today, the commission said it refrained from adding Russian and Albanian airlines to the blacklist because of “strong measures” by authorities in the two countries “to control and contain any risks to safety of their air carriers flying into the EU.” 

Jet Airways needs to raise money: Auditors

MUMBAI: Auditors to Jet Airways, the country's largest carrier, have warned that the company needs to raise money in order to meet its obligations and fund JetLite, its loss-making subsidiary whose net worth has already been eroded.

Deloitte Haskins & Sells and Chaturvedi & Shah have also said raising money is critical if the company's accounts have to be prepared on a "going concern basis" in the future.

"The appropriateness of assumption of going concern is dependent upon the company's ability to raise requisite finance or generate cash flows in future to meet its obligations, including financial support to its subsidiary," the auditors have said in a note to the company.

The note was written on November 11, the day Jet announced its September quarter earnings, and is signed by RD Kamat, partner at Deloitte, and Parag D Mehta, partner at Chaturvedi & Shah. The letter was released to the stock exchange on Monday by Jet.

Going concern is an accounting concept under which accounts are prepared on the assumption that the company is likely to continue operations for an indefinite period. Any doubts or qualification from the auditor about the company's going concern status is, therefore, likely to spook investors and cause concern over its viability.

Jet said it is confident of getting equity soon. It plans to raise $300 million in sale and leaseback of 40 aircraft owned by the company. "We are in talks with leasing companies and are close to finalizing sale and leaseback for the aircraft that are owned by Jet," said M Shivkumar, senior VP, finance, Jet Airways.

Industry to See Worst Losses

"We are confident that we will be able to generate good revenues as October-January is a good season for airlines where we will be able to hold yields," the Jet executive said, adding, "Jet is also undertaking rigorous cost-cutting measures that will bring costs down going forward."

The domestic airline industry is facing turmoil after Kingfisher, the second-biggest carrier, canceled most of its recent flights due to a severe cash crunch and a dispute with lessors, which own most of its aircraft.

Rocked by surging fuel costs and severe competition, the airline industry is battling to stay afloat and has pleaded with the government to lessen its burden by cutting taxes and allowing foreign airlines to invest. Analysts say it is the sector's problem now. "The industry is going through a very tough time.

It is a tricky situation whereby the market is not shrinking but there is pressure on yields and margins. Airlines cannot do low-cost and full-service business models at the same time and they need to decide their focus to avoid this confusion. The government also needs to look into the high costs of fuel and other related charges like airport fee," said Vishwas Udirkar, partner/senior director, Deloitte Consulting.

The sector is expected to see unprecedented losses of $2.5-3 billion said this year, a Centre for Asia Pacific Aviation report has said. Two months ago, Kingfisher's auditors-BK Ramadhyani & Co-made a similar point about the airline's finances and its ability to stay in operations.

Chopper crew battle storm to rescue crash victim

An emergency helicopter crew has tackled difficult weather conditions in the middle of the night to get an accident victim to hospital.

The Palmerston North Rescue Helicopter Team was called to a serious car crash at Norsewood shortly after 10pm.

A man in his late twenties was in a serious condition after his car left the road, leaving him with multiple fractures, and internal as well as external injuries.

The chopper crew used night vision goggles to airlift him in strong winds and rain to Palmerston North Hospital.

Sikorsky Aircraft plans more job cuts

Sikorsky Aircraft has told workers another 3 percent of its workforce would be cut in the next 12 months as the helicopter maker anticipates a drop in U.S. defense spending and further slowing of the global economy.

The company announced in September it was cutting 3 percent of its workforce and later told congressional representatives the total would be 567, with 419 in Connecticut. The majority of those cuts are to affect union workers in Stratford, who are still negotiating with management over which workers will be eligible for a separation package. In June, it announced a 386 staff reduction in its Military Completions Center in New York.

The latest round, would also appear to top more than 500, though the company did not say where the cuts would be falling the most, not provide a specific figure.

The company has nearly half its workforce of 18,000 in Connecticut.

"While the previous restructuring announced in September primarily involved the company's hourly workforce due to declining work volumes, the action announced internally last week affects the salaried workforce more so," said Sikorsky spokesman Paul Jackson. "Specifically, the reduction will affect about 3 percent of the company's total workforce."

The company is offering a voluntary severance package to workers 55 years and older with at least 10 years of service. Those interested in accepting the voluntary layoff have until Dec. 5 to submit a letter of intent, with the company setting Jan. 6 as the final day for agreements to be signed.

In a letter to employees Friday, Sikorsky President Jeffrey Pino said the cuts would play out over the next 12 months.

Including this latest round of job cuts, Sikorsky has made plans to reduce its global work force by more than 6 percent.

Though defense cuts are expected to made in the U.S. in the face of a tight federal budget, defense analysts say those cuts will likely be made to future spending, rather than immediate programs. And helicopters in general remain a favorite of the U.S. Army and Marine Corps programs.

From Central Park to Jurassic Park: JetBlue Flies from New York City to Liberia, Costa Rica

So you want to go to somewhere warm this winter but you're not sure where? Get out a map right now and put your finger on the city of Liberia, Costa Rica because it just happens to be JetBlue's newest route and also is on special at $119 each way if you book before December 1 and travel before February 16, 2012. Not bad...not bad at all.

To understand why this town near the Pacific coast of Costa Rica is so hot, we tagged along on the inaugural flight last week. As usual, JetBlue likes to make a big deal out of their new routes, and so the whole flight was one big party; passengers heading down for birthdays, bachelorette parties or just for a relaxing weekend were treated to breakfast and cupcakes at the gate at JFK, complimentary Costa Rican Imperial beer onboard, in-flight trivia with entire vacation packages as prizes, and—perhaps the best perk of flying on an inaugural—plenty of space to stretch out.

Uganda Peoples Defence Force plane crash lands at Entebbe airbase

There was stampede at Entebbe airbase Monday evening when a plane crash- landed after its tires failed come out during a fly-testing run.

Witnesses said it was one of the newly acquired fighter jets but the army denied, saying it was different plane.

“This was a four-seater plane, not the new jet and all passengers came out alive. The pilot made a mistake during crash-landing stimulation exercise but it’s in good condition,” the UPDF air force spokesperson, Capt. Tabaro Kiconco said.

Witnesses said the crash caused big bang when it touched ground before police fire brigade rushed to the scene to rescue the situation.

By 9pm it was still lying in the middle of the runway with airport staff and police fire brigade surrounding it.

“I was at Kigungu stage and heard a bang on the runway prompting us to run and see what was happening. I then saw the jet moving on its berry for some distance before it stopped,” the witness said.

Some lights at the runway had been switched off and two passenger flights of Kenya Airways and South Africa Airways could not take off.

Cessna 150 and Piper PA28: Airplanes collide in flight on landing approach, killing 2. Buenos Aires, Argentina.

Two planes have collided while both were approaching to land at an Argentine airport, and two people have died. Argentina’s air force says one of its planes collided with a civilian plane as both were approaching the small airport in the town of Mercedes, about 60 miles (100 kilometers) west of Buenos Aires.

Air force spokesman Gabriel Otero says two people aboard the civilian Cessna 150 were killed when it crashed. The air force’s Piper PA-28 Dakota landed safely with two aboard. He says the planes “touched in the air” on Monday as they were preparing to land. Civil aviation authorities are investigating the collision.

Western Air celebrates 10th Anniversary by rewarding customers

This November Western Air is celebrating 10 years of airline service in The Bahamas. What started with a C6-Rex plane, nine employees, and one route from Nassau to San Andros has now transformed into a national airline service with 36 flights daily on eight different routes, 116 staff and a growing fleet of 10 airplanes.

"When we started the airline there was inadequate and unreliable air transport services on the routes and areas we currently service now," said Rex Rolle, CEO of Western Air.

"We saw an opportunity to service these markets by basing an aircraft in these islands, and we concentrated on providing reliable, on time, efficient and safe service at an affordable price."

Currently Western Air offers several daily services between Nassau, Andros, Grand Bahama, Bimini, Marsh Harbour and Exuma. They also provide corporate and tourist charters throughout The Bahamas and international destinations in the Caribbean and South Florida.

"We are a growing business but our success has been because of our incredible local support," Rolle stressed. "Just like we did when we started we will work with groups to help get the people to their events – we love supporting local regattas, Junkanoo festivals, you name it!"

Despite the company's biggest challenge, the unpredictable ever increasing price of jet fuel, Rolle noted that the family-orientated business is keeping their eyes on price and their faithful customers. "To celebrate our 10th anniversary we are giving back to our most important assets, our clients.

"By simply "liking" our Facebook page they are automatically entered to win one of eight round trips we are giving away this month as well as the grand prize pull of two round trip tickets!"

Winners will be notified on Facebook weekly noted Rolle, "this is a great medium for us to get feedback from our customers and we want to assure them we get all their messages and comments." Using social media has become a great asset for this fledgling airline.

"We want to grow but we are cognizant that we must not loose our family island appeal."

After the celebrations the team will concentrate their efforts on opening their 8,400sq' state of the art terminal and the 16,800sq' maintenance facility at the Grand Bahama International Airport.

Rolle noted "the long-term plan is the expansion of routes to the Caribbean and U.S. from our new Grand Bahama hub.

"We will relocate our headquarters and main maintenance facility from San Andros to Grand Bahama and this new facility at GB International Airport will become Western Air's new headquarters and maintenance facility."

Member Rosekind Announces NTSB Forum on Public Aircaft Oversight

Airplane experiences "hard landing" at General Mitchell International Airport (KMKE), Milwaukee, Wisconsin. Plane may have suffered strut or brake failure


Emergency crews at Mitchell International Airport are surrounding a Delta Airlines passenger jet this hour. This, after what a passenger describes as a "hard landing" by the aircraft.

Steven Brown, the passenger, says the plane was coming to Milwaukee from Detroit. He says the landing was rough but nobody on board the plane was hurt.

Brown says the pilot indicated there may have been a strut or brake failure on the plane.

Two airlines are doing everything to ensure Kingfisher collapses: Vijay Mallya

Suman Layak and Geetanjali Shukla November 21, 2011

Vijay Mallya met Suman Layak and Geetanjali Shukla so late on November 17 that by the end of the interview the clock had ushered in a new day. The liquor baron sipped red wine and smoked his favourite cigars, lighting up more than one in his ashtray. He pointed out a television-ticker on FDI in airlines - betraying some satisfaction on an otherwise poker-face. At the end of a day full of meetings to salvage Kingfisher Airlines from its difficult position, Mallya moved in to his Hoechst House office at Nariman Point for this interview from the Belvedere Club at the Oberoi. Edited excerpts:

Suman: When you started the airline, you surely had a breakeven plan… what went so wrong that the airline is yet to make a profit? Did something not go according to your plan?

Mallya: Within three years of launching KFA and after the acquisition of Deccan we became the largest player. At that time it was seen by the industry that it was a good consolidation play, a savvy move. Deccan was seen to be an irresponsible pricing player…if you recall the Re 1 tickets etc…it reflected in the share price which shot up beyond Rs 102. Immediately after that we flew through the turbulence of the global economic meltdown of 2008-09. Only in 2010 was there any sign of recovery. Again in early 2011 we started facing high fuel prices due to the high prices of crude oil and a global slowdown as well economically. That is really the issue. Oil prices are high, yields are low and capital raising is difficult under these global economic conditions. This is the second time that it is happening. Talking about whether our business model was right or wrong, we are the recipients of 38 national and international awards for the best airline. We have over 2 million members in our King Club loyalty programme. So one cannot speculate on whether what we did was right or wrong. Now, the challenges are how to reduce costs, except that we have no control over the actual price of AFT fuel. The biggest killer is the advalorem sales tax. It is extremely unfair…very unfair that we have to allow states to make windfall profits at the direct expense of damaging the aviation industry. I have so many CMs coming to me and asking me for intra-state connectivity. But they will tax fuel in a highly unreasonable way which is killing the aviation industry.

I am used to paying high tax because I run the liquor business, which is the most highly tax business in the country. State governments have an insatiable thirst for revenue. But when the finance minister prepares the annual budget he does not speculate the earnings based on the prices of international commodities. States are collecting an average of 25% advalorem tax on ATF. When it was $40/bbl in 2009, $50/bbl in 2010, they never complained, they were quite used to it, because $40/bbl remained for 10 years before that…that is the level that they were used to. Now at $115/bbl they are charging the same rate of tax and collecting that money as well. So where is the state government support for aviation? Where is their commitment to connectivity? You take the case of the then AP government, when the new GMR airport was built they dropped the sales tax to they should. But because no other state followed suit, they raised it back to 16 per cent. I have senior politicians from Maharashtra who want me to fly to Nashik, Nanded, Latur, Solapur…they want me to fly everywhere. The (state) finance minister announced two years ago…a year ago…said pleased to announce sales tax on ATF is 4%...I said wonderful…(but they said this holds for all cities) except Mumbai and Pune. (Smiles sardonically) What's the use?! In all of Maharashtra it is 4% except Mumbai and Pune.

What sense is this? I read in this morning's newspapers that 4 UK airlines have got together and requested the UK government to cut the tax. Here, despite repeated requests to the state governments they are not prepared to. Now, you should also be aware that there is a precedent to this. Some years ago government declared ATF used by small turboprop planes as a declared good and a 4% sales tax, saying that this promotes connectivity. Then the same government some 3 or 4 years ago suddenly changed and said that aircraft below 40 tonnes max takeoff weight will be entitled to the 4% status. This included the Embraer jets. Today, why should airlines be penalised by the average 25% sales tax? If govt wants to encourage connectivity across the country they should stop this. Now the time has come that the average number of fliers across the country have grown to 50 million a year, slated to grow to 270 million by 2020. You can no longer differentiate between small planes and big planes. Planes are planes, they provide connectivity and growth. If you want to encourage growth you cannot continue to have small planes, because in a strongly growing market, you need more and more capacity. So what is the sense in state governments having a hugely unfavourable tax regime?

Then what else changed? The rupee has depreciated. All our payments for aircraft lease etc are denominated in the dollar, that has pushed the cost up immediately. Then look at the airport charges, they have gone up and are amongst the highest in the world. If charges have gone up and passengers may benefit from nice looking terminals, lounges but that has not improved the efficiency for us. Instead the same delays still exit which make us burn more fuel and add to our cost. Then you look at the air routes in India due to the no-fly zones you have to fly longer routes and burn more fuel. The no-fly zones were put into place during the British rule in the 40's. If you have direct air routes, you save time, you save fuel, you save costs, and lesser emissions. Then govt has put service tax, state sales tax are there only. Bottomline is there is nothing which is a low-cost carrier in India any more. All costs are the same, the routes are the same. The only difference is the frills.

KFA strategy. Some of the carriers in India have ordered huge number of aircraft. All of them are single-class, high density planes, they charge low fares - I will never call them low cost. Can you imagine how much these guys are going to fight among themselves? Now see where I am taking my position. I am not interested in scale and size, to be as big as them. My first thing is that I must be profitable and viable. With India's economic growth where it is today, there has to be growth in the SME segment, there has to be growth in the corporate segment, business has to grow, otherwise where will economic growth come from? We will focus on that segment. That may not have spectacular 25% growth but at least that will have 15% growth. I am quite happy with that. Why? Because my yields are better thus. People are ready to pay for the convenience of being served a nice hot meal rather than they having to pay on board to eat something. People want a lounge facility, people want frequent flyer miles, people want the benefit of network connectivity. Therefore people are willing to pay more. That is the market we are considering. KFA Red was basically the Deccan aircraft, single-class, high density where I also had to be in the no-frills space. Rather than that we are reconfiguring all those aircraft and we are saying that we will have the dual cabin and our yield will be much better. Because we are saying that we get Rs 700-1000 additional per passenger, we spend Rs 200-250 on meal, we are still pocketing Rs 500-700 more than anybody else. That is the right way to be. What happened in this high cost environment is that AI started offering very low fares. Why did AI offer low fares because there was some press article which said that AI is rapidly losing share. So the then CMD in order to show that AI's performance was improving a lot lowered fares without realising that the cheaper that AI sells the more losses it makes. Because it is high cost airline.

Suman: Elaborate on the sector that you are focusing on…
Mallya: I am saying that if you take a pyramid, the bottom of the pyramid is where people are transferring from bus to plane, train to plane. This is where the LCCs are playing because their aircraft are for the low-fare product. There will be a bloodbath there. If you go up the pyramid, up the value-chain, there is the business class passenger, the J class passenger who's on the top, then there people who are not paying for the J class but who are paying for full-service economy, that's the space we want to play in, which is supported by the Indian economic growth forecast.

Geetanjali: How many seats are you looking at with the reconfigured aircraft?
Mallya: Currently in the Airbus 320 we either have 180 all-economy or we have 20 first class - what we call Kingfisher First - and 114 in the back, so 134 seats in all. We are reconfiguring all aircraft to have 8 Kingfisher First plus 156 in the back, that is the total of 164.

Suman: You spoke of a strategic investor…a strategic investor apart from money also brings something else to the table…
Mallya: See, there are two types of strategic investors. Now I am seeing on CNN-IBN which is basically saying that the civil aviation ministry has confirmed FDI. So now it has to go to CCEA, and all the rest of it… This is the first time ever in the last five years that I have seen some spokesman of the government actually say yes - it (FDI) is happening. Which means there will be international airlines willing to invest in the equity of Kingfisher. Why? Because Kingfisher has a huge network in India, which can feed into foreign carriers' flights in and out of India. It is the same thing as the advantage that will accrue to Kingfisher by joining the oneworld alliance. Without waiting for policy change and foreign direct investment, my priority has been to recapitalise the airline with equity and not with more debt. Therefore, I am in discussions with an investor who has made me a proposal and that could be upward of Rs 1,000 crore. I have applied to banks for working capital worth Rs 600 crore from banks, which is secured by current assets. Working capital loans are secured by current assets, that is the meaning of working capital.

Geetanjali: Will you look at something like the Force One deal where fresh equity will be issued to the incoming investor?
Mallya: Correct.

Geetanjali: Your stake will not be diluted?
Mallya: It will be diluted, but it all depends on the price and terms.

Suman: We were speculating about the nature of the investor, but you are saying that you are specifically talking to one person…
Mallya: (We are talking to) one person as in one Group, as in one entity.

Geetanjali: You mentioned that you are open to getting foreign airlines to invest in Kingfisher. They will not come without riders. So how will you ensure that the Kingfisher brand, which is perhaps the most strongest thing about the airline, remains intact?
Mallya: If there is an airline called World One and that invests in KFA then you cannot expect that KFA's name changes to World One. You have global alliances like Star, but the bigger and better alliance is oneworld. Oneworld members are BA, American, Cathay Pacific, Qnatas, Iberia, JAL, they all operate under their own brand name they haven't changed their names to oneworld. So Kingfisher will fly as Kingfisher. In fact, since KFA has a huge brand equity why should somebody want to change it?

Suman: Is the working capital issue closer to a resolution?
Mallya: As you know, every company's working capital is appraised every year by its bankers. Growth requires more working capital, for instance. Here we have higher costs (than most industries), we have growth, then working capital is like an algorithm. It is not just costs, yields, it also the working capital cycles - timing of receipts versus timing of payments. All this constitutes the working capital algorithm. We have a justifiable request to the banks which has been already appraised for an increase in working capital, but that is largely been driven by the increase in the prices of fuel. We have had two consortium meetings (the 14-bank consortium which brought into Kingfisher early this year) and have placed the request before the banks.

Geetanjali: When were these meetings conducted?
Mallya: The last meeting was conducted last Saturday (November 12th).
(Pointing at TV) Yeah - there - aviation ministry - airline FDI

Suman/Geetanjali: Firm on 24% cap
Mallya: Whatever the case may be.

Suman: 24% is okay enough…
Mallya: There's nothing wrong with 24%, at all.

Suman: So aviation investors will be okay with a 24% cap?
Mallya: Why not? At the end of the day 24 per cent is a significant shareholding. This is all very hypothetical that I will block a special resolution. That is the only benefit that a 26 per cent gives you. But who would want to have such a dramatic game changing resolution that a 24 per cent shareholder has to object to. At the end of the day when you invite somebody to invest that much money, in your company, you virtually, become his associate. The blocking of special resolution - and what is a special resolution - please read the Indian Companies Act. 26 per cent… special resolution is for game changing stuff. 26 per cent blocking minority is not in the normal course of business. If you invite an investor who will invest 24%... what is the game changing resolution which anybody will pass that the foreign investor must exercise the right of veto. Please be reasonable. Completely hypothetical.

Suman: Do you have at any stage felt that - acquiring Deccan, do you regret that decision?
Mallya: Why? Please, I began by saying that when I acquired Deccan, the stock shot up to 180 rupees. So if the same commentators today, who are criticising me because of their convenience. Because when you are perceived to be in trouble, every body hammers you harder. The same investment advisors said this was the best thing I ever did. But, let's now forget about what other people are saying. Let me tell you from my perspective. I got, lot of routes and expaded the route network through acquisition of Deccan. Second, I got a lot of parking slots, departure and arrival slots at various airports. Because when Gopinath started Deccan he was the new kid on the block, there were only Jet and Air India. There was still available infrastructure. Now where is the infrastructure. I got hangars. The hangar was very important as Kingfisher could not get hangars. There were no hangars available. So all our aircraft for their C-checks, regular maintenance had to go to Abu Dhabi or Malaysia. Now we can do everything in-house in Chennai. So, its all very well to keep harping on Deccan acquisition. Look it is the same plane. Deccan was a low-fare carrier with 180 seats. All I am going to do is.. the same aircfart, the same plane, all I am going to do is to change to eight plus 156.

Geetanjali: Do you feel you overpaid for the airline, in retrospect?
Mallya: No. Please see what Mr Naresh Goyal paid for Sahara and what I paid for Deccan? I bought a bigger airline for cheaper cost. I bought a bigger airline at a cheaper cost….

Suman: There is a question about shareholder concerns, especially the UB Shareholder and whether you will use UB to bolster Kingfisher…
Mallya: Who has raised this issue? First of all, I want to clarify that there are no shares of United Spirits or my core businesses that is pledged for any Kingfisher loan. Point no 1. Point no 2: Kingfisher loans are primarily secured against Kingfisher's assets. Both fixed assets and current assets. The mother company is UB Holdings, that has put money into Kingfisher. United Spirits and United Breweries are not connected at all with Kingfisher.

Geetanjali: How many of UB's shares in Kingfisher are pledged?
Mallya: No…under the master debt recast agreement terms of December 2010, our entire shareholdings in Kingfisher Airlines only is pledged to the banks. That's part and parcel of the debt recast.

Suman: Is there anything that you would have done differently if you had the last five years to do it again?
Mallya: What could you do differently man? I cannot predict…nobody predicted… the whole economy is in turmoil. Please ask the finance minister, the oil companies, the subsidies, the GDP deficit of the government is all due to the oil prices workldwide. Now if I had a crystal ball to know… I would have thought differently .. but who predicts it?

Geetanjali: There are all kinds of figures bandied about… airport charges etc….
Mallya: But I don't understand. How… is the airline flying, have you bothered to think? You can go on and speculate and on… but the airline is flying. So if you keep saying I owe money and I do this and do this… for instance you have a car… you have a house… you pay your EMIs…now have I a right to tell you… you owe so much for your house… you owe so much for your car? So…I don't get it? I may owe whatever I owe, but I am flying, which means I am paying. So are you suggesting that I am not paying and someone is giving me a free ride? So how is it relevant as to how much I owe? Whatever I may owe or not owe.. keep it to one side. How is it relevant. Why don't you look at the more positive side? Where from thousands of crores of unsecured credit to oil marketing companies, unsecured…I have completely paid Indian Oil, I have completely paid Bharat Petroleum and I owe unsecured Rs 40 crores only to HP. So how much have I paid off? Nobody focussed. But I am not asking people to write my virtues. And say that Kingfisher has paid so much money. I am saying, whatever I owe… so long as I am in compliance of my payment terms… why should there be such a big debate? No I am just asking you…

Suman: I think the debate was fuelled by the cancellations…..
Mallya: See that fact is that we could have handled it better. I admit that… instead of what I thought, people will appreciate that Kingfisher management is taking the correct decision to stop the losses and fly only on profitable routes and cut out all the heavily bleeding routes... instead of that the message was bankruptcy. This is a creation of the media…How wrong could one possibly get?

Suman: There is also a stakeholder who is the passenger, the flyer…
Mallya: Now…let me please address that issue… you are very correct in your questions … that is why I am telling you everything. We pride ourselves in our service standards and service quality. Do you think we would not have reached out? Do you really think we will be so uncaring and irresponsible that we will say we are cancelling your flights… to hell with you? We have gone and contacted more than 90 per cent of all those who were booked to fly with us… rebooked them on other carriers, re-accommodated them on our flights.. other flights.. combined flights as we call them and also refunded with a sincere apology. But we may have not done it correctly for 10 per cent. But unfortunately, the view of the 10 per cent became 100 per cent. Now today - please read this morning's press. One, one passenger is being quoted. "I went to Kingfisher airlines, flight nahi chali…headline news. Now I carry 35000 passengers a day. Did you get 35,000 complaints, 5000 complaints… 10000 complaints? One guy. And you know what is happening now? Geetanjali and Suman…? The public are now using the press as the consumer grievance forum. Anybody has a problem, don't complain to the company don't complain… first thing call the media. And you guys are waiting with bated breath and open arms.. what can I do about it.

Suman: Well now they do not have to come to us.. they tweet… facebook…
Mallya: Ok, I admit and I apologise that cancellations the way it was handled, we could have been done better. I am fully ready to

Geetanjali: That day (November 15th, the day of the press interaction) you had hinted that one of your competitors had a hand…
Mallya: I know whose hand is behind this. I am not going to tell you, but I know. I am not exactly a babe in the woods…Everybody's time will come.

Geetanjali: There are also these policy and regulatory issues which if all airlines go together and approach the government they can be addressed…
Mallya: Two airlines in India want one big airline to collapse, and they are doing everything to ensure that it collapses. It is bit of a contradiction, because they want one airline to collapse so that there is a demand-supply correction and fares will go up, but one of those two is adding more and more capacity every month. I am not naming anybody. And please don't attribute any names to me. I am telling you now.

Geetanjali: No we will not
Suman: We will be faithful to the recorder.

Mallya: You take any other industry, they (all companies) stick together, go together to the government to ask for policy changes, policy reviews, yet they fight like hell as competitors. For me the saddest thing is that our Federation of Indian airlines is a divided house. Though the secy general Mr Anil Baijal is a gem of a man who is trying his best, but we member airlines are not giving him the strength.

Geetanjali: What is the accumulated loss of the airline…
Mallya: That is all there on the website. But once again let me focus on this debt and loss issue…you cannot add loss to debt. Don't make that fundamental accounting error. Debt is a debt. Everybody is focussing on the debt. First check the debt of other Indian carriers operating in India. Check the debt of other international airlines of the same size as Kingfisher. You will find that Kingfisher's debt is not as much of a mountain as you make it out to be. Plus, never forget that we have 9 years to pay this debt. In 9 years where a huge growth is forecast, it is not an insurmountable challenge to pay off this debt. So there is no need to keep focusing on the level of debt. What we are doing because we want to be profitable quarter on quarter, in profit and loss terms, we are cutting all our costs including interest costs. And the focus on interest costs: I would like to clarify when the banks appraised the viability of Kingfisher in December 2010, which is only 11 months ago, it was clearly established to be viable at an interest rate of 11%. With the constant increase in the rates of interest, this has now become close to 14%.

Therefore, we want to reduce our interest burden. One of the way we have thought is that we have cash deposits with our lessors, we want to open standby letters of credit the cost of which is minimal, to the lessors and ask them to refund the liquid cash that is lying with them which is not earning any interest. We will take that Rs 1000 crore equivalent and pay it back to the banks. This means that I reduce my rupee debt by Rs 1000 crore, which means that if I repay Rs 1,000 crore at 14% interest, I immediately save Rs 140 crore. That is all what we are doing.

If the PM of India has very kindly said that he will support Kingfisher and find solutions to our problems, I think that it was very gracious of the PM. I am grateful. However, if you think why, I was not sitting there on Air India One. I was not there requesting him to say something. The fact is that the PM is a renowned economist who understands the importance of connectivity in a growing economy. It is a well-known fact all over the world that civil aviation growth and economic growth go hand in hand. It is not the case of Kingfisher alone. Government has to address the concerns of the whole industry, and ensure its viability. It is a very critical infrastructural asset of the country.

Geetanjali: Your competitor during a conference call with analysts - this was asked even during the press interaction - did not hesitate to criticise KFA. There was talk of how your bet of moving out of the low-cost business was all wrong…
Mallya: See, if I was not a threat they would not have talked about me. It is only because they think I am a threat that they talk of me. And they try to justify their strategy which is different from my strategy. Why should I get involved in all this? I have facts and figures to prove that my strategy and model is better. Maybe when all these low-fare airlines introduce more and more capacity at the bottom-end of the market, my worthy competitor may hurriedly change their mind.

Geetanjali: You have been in the aviation industry for long. When you say that you are moving out of the low-cost category...there have been carriers like AirAsia who have managed to shake the wind out of full-service airlines like even Singapore Airlines…
Mallya: What is AirAsia's competition today? There is no competition. There is Malaysian Airlines which is like Air India. There came along my good friend, Tony Fernandes, with a good product, cheap fares and captured the market. Now he is controlling Malaysian Airways itself. Malaysia is a 14 million market, this is already a 50 million market, going to 275 million by 2020. You cannot compare the two. The scale, the size, the geography, all are different. That is why you cannot operate a low-cost airline in the country.

Suman: You mentioned interest costs. Are there any other areas of cost that you are targeting?
Mallya: I would like to pay the Airport Authority of India in the full and avail of the 15% cash discount.

Suman: So what is the backlog like…
Mallya: Whatever it is, if you pay cash you avail of the discount. That is better working capital management.

Suman: Any progress on the plans to import fuel directly…
Mallya: This was a subject of great debate on TV today (November 17). I am aware of the present rules where the import of fuel has to be canalised through the Indian oil companies. However the DGFT has granted exemption in other cases in other commodities. Our objective is that cost of aviation fuel is critical to the viability of airlines. On these grounds we have applied for direct import of fuel. Somebody came on TV said this is all bogus. If he (Vijay Mallya) brings fuel, where will store it, how will he use it? It is very simple. I import the fuel to JNPT. I have already spoken to a major oil company, who is willing to take it to the airport and pump in a plane for a fee. Not gratis, not free of charge. I have a net saving where the sales tax is an average of 25%.

Suman: You will not need to store it?
Mallya: It will move from the ship to JNPT and then the oil company takes over. The oil company is doing pretty much the same thing.

Geetanjali: Oneworld has stuck by you through these turbulent times…
Mallya: Yes, we have the product and connectivity, which will benefit the alliance. Oneworld is looking forward to welcoming Kingfisher Airlines on board. We will be joining the alliance in February.

Suman: Thank you so much, Mr. Mallya.