AVIATION

Arrest warrant issued for Indian magnate Mallya

An Indian court filed an arrest warrant Friday for Vijay Mallya, a Formula One tycoon nicknamed the “King of Good Times”, over allegations that cheques written by his troubled airline had bounced.

The non-bailable warrant was issued in the local sessions court in the southern city of Hyderabad against Mallya and four other executives in a dramatic escalation of the crisis facing his cash-strapped Kingfisher Airlines.

Mallya's whereabouts were not immediately known although a member of his entourage said he was out of the country.

The warrant was issued as the airline announced it was extending its shutdown until October 20 due to a dispute with striking staff over wages that have not been paid for seven months. Kingfisher has been grounded for nearly two weeks.

“At this time, the airline is hopeful of resuming operations starting October 21st,” Kingfisher said in a statement late Friday.

The arrest warrant for Mallya was triggered after a complaint was lodged before the court by GHIAL, the operator of Hyderabad airport, over non-payment of bills. “The cases were listed today for the airline to appear in the court,” said a GHIAL spokesman.

“Since they failed to appear before the magistrate, the court has ordered issuance of NBW (non-bailable warrants) against Kingfisher Airlines (KFA), Vijay Mallya and four other KFA officials,” the spokesman added in a statement to AFP.

Kingfisher's lawyers had urged the court not to issue the warrants but their request was dismissed by Judge Kedara Chary, said a report from inside the courtroom by the Press Trust of Indian news agency.

The cheques for 105 million rupees (around $2 million) were to settle user fees at the airport for services such as the parking of jets and landing charges. Mallya is a cigar-puffing tycoon who inherited his father's beer business and built it into an empire spanning fertilizers, top European alcohol brands, Formula One team Force India and a cricket club, Royal Challengers Bangalore.

But the 56-year-old, who is also an independent member of parliament, has come unstuck with Kingfisher Airlines, which was launched in 2005 but has never made a profit.

The debt-ridden airline, named after Mallya's biggest beer brand, owes billions of dollars in taxes, airport fees and to staff who have not been paid since April. With its fleet on the ground, it faces the prospect of having its licence cancelled.

Negotiations on persuading staff to return to work foundered once again on Friday and the fleet will therefore remain grounded until at least October 20, according to the Press Trust of India.

Last week, the wife of an airline technician committed suicide, reportedly because of the financial stress caused by her husband's unpaid wages, leading to renewed scrutiny of Mallya's lavish lifestyle.

Mallya owns a yacht, property across the world and a fleet of vintages cars. But his empire is facing an increasing financial crunch.

His flagship United Breweries (UB), India's biggest brewer, is in talks to sell a stake of the profitable liquor empire to Diageo, the world's largest distiller, which analysts say could raise $800 million.

Hyderabad's police chief Anurag Sharma told AFP his department had not yet received the arrest warrant for Mallya. Once we receive it, “we will see what exactly is the instructions”, commissioner Sharma said. There was no immediate comment from Mallya on the latest developments. Calls by AFP to Kingfisher executives' mobile telephones were not answered on Friday but a person who answered the phone at the tycoon's home in New Delhi said he was out of the country. Kingfisher Airlines was India's second-largest airline until a year ago but now it has a market share of just 3.2 percent, the smallest of the country's carriers.

A report by the Centre for Asia Pacific Aviation, a Sydney-based consultancy, says Kingfisher's debts total $2.49 billion including bank debts of $1.1 billion, and it had accumulated losses of $1.9 billion.

Lankan first to unlock prize in Emirates’ ‘Flock to Unlock’ competition

An ICC World Twenty20 Twitter and Facebook campaign run by Emirates and the ICC has attracted 600,000 ‘hits’ and unlocked 19 fabulous prizes for fans around the world.

Lucky visitors to www.facebook.com/emirates, and those who tweeted T20 to participate in the Emirates ‘Flock to Unlock’ competition, have already won return Business Class flights from any Emirates destination to Dubai, 105,000 Skywards Miles from the airline’s frequent flyer programme, 82,500 Skywards Miles, a return Economy Class flight to Dubai, 50,000 Skywards Miles, a two-nights hotel stay in Dubai and access for the winner and a friend to the Emirates Lounge at Terminal 3 of the Dubai International Airport.

The first of the 21 prizes to be unlocked, two match tickets for the ICC World Twenty 20 Final in Colombo, was won by a Sri Lankan, Dilushya Nishendri, who works in the tourism sector.

Improved performance cushions fall in profits

International Air Transport Association (IATA) announced an upward revision to its global aviation outlook for 2012. The fall in airline profits from the $8.4 billion that the industry earned in 2011 will be cushioned by improved airline performance. Airlines are expected to earn $4.1 billion in 2012 (up $1.1 billion from the $3.0 billion forecast in June).

“The European sovereign debt crisis lingers on. China continues to moderate its growth. The outlook improvement is due to airlines performing better in a difficult environment,” said Tony Tyler, IATA’s Director General and CEO.

Globally, aviation supports some 57 million jobs and $2.2 trillion in economic activity.

Over the last three months, oil prices have been volatile, declining to below $90/barrel (Brent) in June and then peaking around $115 in late August. Overall, the forecast remains for an average oil price of $110/barrel for the year.

Jet fuel prices, however, have increased by $1.20/barrel (in the June forecast) to $127.70. This will add $1 billion to the industry fuel bill, bringing an anticipated $208 billion cost for the year.

The passenger market has performed well in the face of weak business confidence in Western economies. Demand is expected to grow by 5.3% over the course of 2012, which is 0.5 percentage points better than was foreseen in June.

On the cargo side of the business, demand has fallen into negative territory from the 0.3% expansion anticipated in June.

Asia-Pacific airlines are set to post a $2.3 billion profit for the year. That is $0.3 billion better than previously forecast. With 40% of the global cargo market, the region’s carriers are the most exposed to weak cargo demand.

Middle East carriers are expected to post a $0.7 billion profit, up $0.3 billion from the previous forecast. Although global cargo markets have been basically flat since the end of last year, the region’s carriers have captured the majority of what growth there has been.

Over the first eight months of the year, the region’s cargo capacity has expanded by 13% while demand has increased by 14%.

AFP

Cathay Pacific unveils new Regional Business Class

Cathay Pacific Airways recently unveiled its new Regional Business Class product, coinciding with the airline’s 66th anniversary as Hong Kong’s home carrier.

Speaking at an unveiling event held at Cathay Pacific City, the airline’s headquarters, Chief Executive John Slosar said: “Our new Regional Business Class seat was developed after listening to our customers’ feedback and it underlines our commitment to excellence in innovation and providing an exceptional travel experience.”

The new inflight product is the result of an intensive passenger-led design process involving input from the airline’s Marco Polo Club members to refine comfort, versatility and function. Every aspect has been thoughtfully designed around passengers’ needs, providing a space in which to dine, work, read, watch TV or simply relax.

The principal feature of the new product is the seat, which offers an extensive recline, extended legrest and innovative cradle motion that ensure passengers can rest in comfort.

The seat has also been sculpted to maximise passenger living space. Each seat is encased in a fixed shell ensuring that passengers’ living space is not encroached upon by the passenger in front. A multi-port connector includes an USB port that can be used to charge devices such as mobile phones and BlackBerry devices.

Other highlights of the product include the introduction of the StudioCX widescreen on-demand entertainment system, which is a new feature for Cathay Pacific’s regional fleet.

The new Regional Business Class product will be installed on all of Cathay Pacific’s regional Boeing 777-200/300 and A330-300 aircraft. The first Boeing 777 aircraft is due to enter service in January 2013, while the first A330-300 will be completed in the fourth quarter of 2013. All of the airline’s regional aircraft will be fitted with the new product by the end of 2014.

This latest product development follows a number of other recent enhancements to Cathay Pacific’s inflight offering. In 2011, the airline introduced its new long-haul Business Class which was voted “World’s Best Business Class” by over 18 million airline passengers in the recent Skytrax World Airline Awards. Earlier this year it introduced its new Premium Economy Class and a new long-haul Economy Class seat, both of which have been winning praise from customers.