AIR India is making new product and distribution moves as part of a US$360 million financial restructuring plan, which will see it adding more economy-class seats and appointing GSAs in 56 countries.

The five-year GSA contracts are meant to garner new markets, as the airline is poised to launch several international routes from New Delhi and Mumbai this year, especially with the entry of its first 787 Dreamliner into service in summer.

Due to low demand for business-class seats, Air India is also reconfiguring 62 Airbus A320s in its fleet, leaving 14 with all-economy seats, while 43 will see the number of business-class seats reduced.

Anil Punjabi, chairman-east, Travel Agents Federation of India, said: “Air India is now looking realistically at its bottom line. More economy seats will help hugely in increasing domestic market share, and given its large network in the country will keep fares low. GSAs are the way to go for international markets.”

In the wake of the economic slowdown in 2008-2009, Air India shut down several of its overseas offices to cut down on operational costs. There are currently 10 overseas offices owned and staffed by the airline.

ACCOR’S launch of its Formule 1 brand in India is seen as a breath of fresh air by travel consultants, who lament the lack of branded rooms in lower-tier categories. The first Formule 1 hotel opened its doors in Greater Noida on April 4, while 10 more properties are expected to be launched by 2013.

According to Philip Logan, vice president Formule 1 Hotels, India, Formule 1 will be the first international budget hotel brand in India with a price of around Rs2,000 (US$40) per person.

Based on the concept of standard rooms with a single price for up to three people, Formule 1 hotels target domestic corporate travellers looking for low room tariffs and quality service standards. They are well known in Europe.

Rajat Sawhney, managing director, Rave Tours & Travel, said: “Such hotels fulfill a much-awaited need. There is a large concentration of travellers who look for clean comfort at budget prices with some standardised facilities. Formule 1 hotels should be able to cater to this requirement.”

Susrita Banerjee, managing director, Fly Faraway, said: “A low-cost hotel offering standardised quality under the Accor umbrella brand will plug a much-needed gap in India’s hotel development. While most branded rooms are in the luxury or five-star categories, development in the budget category is unorganised and sporadic. Formule 1 will be a popular option for many business travellers.”

Located in the business hub of Greater Noida, the new Formule 1 hotel features 114 soundproof rooms with amenities such as a flatscreen TV, Wi-Fi, quality bedding with duvets, attached bathroom, individually-controlled air-conditioning and a work table.

WESTMINSTER Travel has acquired a 100 per cent interest in Travelex Hong Kong, following the completion of a HK$79 million (US$10 million) deal on March 31. The buyout covers only the travel service arm, and Travelex will be rebranded in the next three months.

Diversifying the group’s business strategies was the rationale behind the acquisition, according to Larry Lo, managing director, Westminster Travel. “Currently, our joint venture with HRG serves global corporate (travellers), while Westminster targets the local and regional corporate (sectors). In fact, local SMEs also require (personalised services) and we want to tap into this market.”

There will be no major changes to Travelex’s existing management team, said Lo, with Eliza Ma continuing to head the 85-staff company as general manager for corporate and leisure travel.

Ma said: “In the past, Travelex’s core business was money exchange, and travel services had limited support. Our strategy (now) is to explore SMEs’ needs and deliver tailor-made outbound products with a personal touch.” To fuel growth, 10 more staff will be recruited within a year and a new website with more interactive functions, such as instant online confirmation, will be launched.

Added Lo: “We are open to any joint ventures or acquisitions for generic growth. Our mission is to maintain our market position, and diversification is the way to go because of fierce competition nowadays.”

MALAYSIA anticipates that its hosting of the annual PATA conference in Kuala Lumpur from April 19-22 will attract more events into the country.

Malaysia’s tourism minister and PATA conference chairman, Ng Yen Yen, said: “Hosting the event will enable us to highlight that tourism is taken very seriously in Malaysia with the full support of the prime minister and cabinet.”

“For example, when (the PATA conference) was held in Malaysia in 2001, we did not have a dedicated tourism ministry as at present. It was combined with arts and culture.”

According to Azizan Noordin, acting director general of Tourism Malaysia, Malaysia’s experience of hosting PATA conferences have boosted the country’s reputation for MICE. Malaysia held PATA conferences in 1972, 1986 and 2001.

Since then, the country has also built a slew of dedicated convention centres including the Kuala Lumpur Convention Centre, Genting International Convention Centre and Borneo Convention Centre Kuching, he added.

Themed Building the Business Beyond Profits, this year’s PATA conference has registered 461 delegates from 14 countries.

Tunku Iskandar, PATA’s programme committee chairman said: “There are two key aspects to the conference content this year. One involves young people – young tourism business professionals and students (at local colleges offering tourism courses) – through various sessions and the Social Entrepreneurial Challenge, and the other looks at how to build the business beyond the objective of achieving profits.”

Reporting by N. Nithiyananthan

JET Airways raised its rebooking and cancelling charges by Rs200 (US$4) to Rs950 from April 1, further contributing to worries that fares for India flights are spiralling upwards. The move comes less than a month after the airline increased its excess baggage fee from Rs150 per kilogram to Rs200 per kilogram, citing rising jet fuel cost.

In addition, the recent hike in service tax by the Indian government will translate into an almost five per cent tax impact on airfares, driving ticket cost up by at least Rs200. This also came into effect from April 1. In a separate development, Delhi International Airport is asking for a seven-fold increase in airport charges, which may result in airlines moving their hubs or being forced to pass on the extra cost to passengers. IATA has protested against this proposed increase.

Meanwhile, Jet Airways’ latest increase will impact a large number of passengers as together with its low-cost subsidiary JetKonnect, the airline accounts for more than 25 per cent of market share.

“Due to the huge reduction in Kingfisher Airlines’ flights, fares have gone up by 20 per cent or more. Now these additional charges will make flights even more expensive, leading to less load on most sectors. The ailing airlines are likely to suffer the impact of higher costs on their passenger numbers shortly,” said Sanjay Maniar, director, Travelaid.

Lobsang Phuntsok, managing director, Tawang Tour & Travel, added: “Airlines should try to reduce operating costs to stay competitive, not increase fares and charges.”

AIRASIA is offering more Fly-Thru services, the latest being on Indonesia-China and India-Singapore routes via Malaysia.

Routes covered are from the Indonesian destinations of Jakarta, Bandung, Medan and Surabaya to Chinese cities such as Guangzhou, Shenzhen, Macau and Hong Kong, via Kuala Lumpur’s low-cost carrier terminal. The service also extends to the Chennai-Singapore route.

The enhanced service allows flight bookings to be reflected in one itinerary and booking number, with no transit visa requirements in the Malaysian capital, while also offering baggage check-through to the final destination.

AirAsia has also promised to extend the service to more destinations and connecting points in the coming months.

THE INDONESIAN government is setting its sights on achieving one million arrivals from China by 2014, as it looks to tap on a recent MoU signed between the two countries.

Speaking during a press conference in Jakarta last weekend, the Minister of Tourism and Creative Economy Mari Elka Pangestu said that the recent MoU between Indonesia and China on tourism cooperation – which was signed during President Susilo Bambang Yudhoyono’s visit to China last month – would help to boost arrivals.

The bilateral agreement involved joint marketing and giving support to Indonesia during promotional activities in China and vice versa, Pangestu explained.

Accessibility is a major factor determining the success of the co-operation, said Pangestu, who cited improving flight connections to more Chinese destinations beyond the major cities as crucial to grow traffic.

“Garuda Indonesia has increased its flights from three times per week to daily (between Jakarta and Shanghai), but there are many other cities in China, like Guangzhou and Xiamen, which are potential markets. We also need flights connecting those cities.”

“Garuda, Lion Air, Batavia Air and other Indonesian carries are doing feasibility studies to open services to China.”

Last year, visitor arrivals from China to Indonesia totalled 504,749, a 19 per cent increase over 2010. In January and February this year, the number of tourists from China reached 136,856, a rise of 54.1 per cent over 88,784 arrivals for the same period in 2010.

JETSTAR Japan is gearing up to launch its first flight on July 3, after it was given the green light by Japanese authorities.

The LCC received its air operator’s certificate from Japan’s Ministry of Land, Infrastructure and Transport last week, signalling that its operations, from ground services to engineering to safety requirements, have fulfilled Japanese regulations.

The airline is on track to start flying five months ahead of schedule, according to Miyuki Suzuki, chief executive, Jetstar Japan. It also bests competitor AirAsia by a month, which is expected to commence operations in August.

Based in Tokyo (Narita), Jetstar Japan will fly to Osaka, Sapporo, Fukuoko and Okinawa on a fleet of three new Airbus A320 planes. Tickets will go on sale soon, while proving flights are expected to be held during May. Jetstar Japan is a joint venture between Qantas, Japan Airlines, Mitsubishi Corp and Century Tokyo Leasing Corp.

In anticipation of low-cost aviation growth in Japan, Narita International Airport Corp has announced plans to build a budget terminal targeting LCCs by March 2015.