Recently, I received an email from Blaine asking me a question about awarding international routes. It was a great question that I did not know the answer. I was talking to Dan Webb, who runs the site Things in the Sky on BoaringArea, and was happy to take on the answer. Here is his story:
United Airlines and Air France Boeing 747-400s at San Fransisco.
Here is part of an email David recently passed along from a reader:
“’¦how is the DOT involved in the awarding of international routes? From what I gather, domestic routes at up to the discretion of an airline (if it makes business sense, they fly it) but it appears that a myriad of airports and airlines compete for international routes. Often, these are not even to the same city pairs – just takeoff and landing slots within the US?”
Unfortunately, there’s no simple answer to this question because it varies by country. In fact, the State Department has a handy page that lists every aviation agreement between the United States and other countries.
As Blaine mentioned, domestic routes are completely in control of the airlines. (The only time one might see the DOT assigning a route is through the Essential Air Service program, but airlines bid for those contracts.)
In some cases, open skies agreements allow for similar flexibility. The most notable example is the agreement between the US and the European Union, which gives carriers the freedom to fly from any point in the US to any point in the EU, and vice-versa. (One example is the short-lived Air France service from Los Angeles to Heathrow.)
Other times, agreements between the US and other parties can be a bit more restrictive. Mexico is a good example. In most markets, up to two carriers from each country are allowed to provide service, though three carriers are allowed in a few. But while the agreement does put a cap on the number of carriers, airlines still decide if they want to serve a market or not (but they do need government approval to launch service).
Another example is the current agreement between the US and China. In one recent example, new frequencies between the US and China became available, and a bunch of airlines competed for the slots. The DOT then decided what carriers would end up receiving the frequencies.
If issues like this interest anyone, the process of applying for new routes is quite transparent, with relevant filings available at Regulations.gov. I often go that website to look up all DOT filings and then sort them by date to see what’s been happening recently.
While I was gone recently, a very motivated young man, Vinay Bhaskara, asked if I might want him to write up a guest post about Air India. When I said I would love one, I had no idea he would be so detailed and really re-construct the history of the airline. Things kept popping up and I wasn’t able to share his multi-part story until now.
Bhaskara is a teen-aged aviation enthusiast and blogger. His blog is hosted at Flyertalk (The Gate). He can be found on Twitter (@TheGateVinay), as well as Facebook and Linkedin. His podcast on Asian aviation should also be launching soon. Here is his story on Air India in his own words:
Air India's first aircraft was the de Havilland Puss Moth.
The Air India Story- Part 1
Air India is one of the most confounding airlines in the world today. Once India’s flag-bearer to the world; the aging carrier has slowly disintegrated into the mess currently grabbing headlines today. Such staple routes as Tokyo, Frankfurt, and London just aren’t making money for the carrier; a far cry from the days when they brought the Indian flag to every inhabited continent on the globe except South America. But in order to understand its current problems; it would be helpful to take a look back into the past.
The Early Days
Air India (and its former domestic partner Indian Airlines) has its roots in the vision of J.R.D Tata; India’s first true business scion. Tata was a director at Tata Sons Limited; one of Asia’s largest industrial companies. In July of 1932, he created an aviation department at the company; and began the first un-subsidized (ie: no mail contract from the British) domestic air service in India after receiving a license for through flights between Madras (Chennai) and Karachi via Bombay (Mumbai) on October 15th, 1932. The route, which also stopped in the commercial city of Ahmedabad gave South India an important link into the airline network in Bombay. The initial fleet consisted of 2 Puss Moths; a 2-3 seat propeller aircraft. Such was the success of the carrier that they added an additional Fox Moth; a larger cousin of the Puss Moth that could carry 3-4 passengers, within a year.
By 1935, a technical stop in Bellary had been replaced by a passenger stop in the more important Southern city of Hyderabad and overall frequency had doubled from once weekly to twice. New routes were also on the radar of the rapidly growing carrier; November of 1936 saw service being expanded from Bombay to Trivandrum via Goa using a 5 seat Miles Merlin, which Tata had used to replace the Puss Moths. By 1937 a route to Delhi (via Indore, Bhopal, and Gwalior) had been started and in 1938 the route to Madras was extended to Colombo, Sri Lanka. Tata Airlines’ business got a big boost during this period from a mail contract with the British Empire Air Mail Scheme, under which all First Class Letters between Karachi and Colombo (and all points served in between) were carried by Tata Airlines at ordinary postage rates (on a pound-mileage basis). By 1939; Tata Airlines was operating a fleet of 8 passenger D.H.89s and smaller types from the American manufacturer Waco; in that same year- the carrier bought two 12 seat D.H.86s from Mac.Robertson-Miller Airlines in Australia. But due to the outbreak of World War 2; J.R.D Tata was unable to take Tata Airlines to greater heights.
TATA's time table during the summer of 1935. Photo from Wikipedia.
During World War 2; the growth in new routes slowed for Tata Airlines. But because the War was relatively docile in India; demand on existing routes continued to grow. They upgraded their fleet constantly; eventually jumping up to a fleet of 3 Stinson Model As, as well as multiple 14 seat Douglas DC-2s. This new lift helped Tata spread its wings to Bangalore, Nagpur, Calcutta, and even Baghdad, Iraq by June of 1945 (nearing the end of the war).
Following the end of the war; Tata Airlines switched its emergency (ie: for war) route permits with actual route rights from the government. All routes were confirmed by June; and Tata was given access to war surpluses; resulting in a large fleet of at least 12 Douglas DC-3s; an aircraft which formed much of the fleet of Asian carriers in the 1950s. On July 29, 1946; Tata took his company public; and the carrier was re-named Air India Limited. In April of 1947; Air India received the first of 4 35-seat Vickers Vikings; for use on the larger routes in their network. As Air India continued to grow; it became a government owned corporation in March of 1948; later that month they received their first Lockheed Constellation; a large turboprop.
Running in parallel to the expansion of Tata Airlines were a few other Indian domestic carriers; such as Indian National Airways (INA) and Air Services of India (ASI); both of which had domestic networks rivaling that of Air India Ltd. Smaller private players abounded as well; Bharat Airways’ network extended all of the way to Bangkok, Hong Kong, and Singapore. As the government searched actively for ways to strengthen the Indian aviation industry; the nationalistic undercurrents in Indian politics called for a single national domestic airline. They got their wish on June 15th, 1953 when all Indian domestic carriers; as well as the domestic arm of Air India Ltd. were merged to form the Indian Airlines Corporation. The resulting carrier had a fleet of over 100 aircraft; ¾ of which were DC-3s, as well as a dozen each of the larger DC-4s and Vickers Vikings. Air India Ltd. was re-organized as Air India International (AII- later shortened to Air India), and given exclusive rights (amongst Indian carriers) to carry long-haul international traffic.
*From this point on; the stories of Air India and Indian Airlines will be told in parallel.
The Expansion
Before losing its domestic operations to Indian Airlines, Air India had also pursued its own international expansion. Soon after receiving the first Constellation, Air India introduced service to London; by way of Cairo and Geneva. Despite strong initial demand however, Tata was cautious, and he limited Air India’s initial international expansion to London and Nairobi (via Aden, Yemen) with its large ethnic population of Indian businessmen. But progress was not to be held back. The London services quickly jumped in frequency to 3 flights per week and new European points were added quickly to the London route; Rome, Paris, and Dusseldorf. Though Air India grappled with the time savings of the new Comets flown by BOAC (they even ordered a pair); they fought back with superb on-board service. Air India was especially beloved for the humorous little booklets it handed out to every passenger; with such useful information as how to (not) steal cutlery and a reminder not to stuff children in seat-back pockets.
An Air India Super Constellation (VT-DJX) Photo by: J. Roger Bentley
Despite the lack of jet service to compete with BOAC; marginal improvements came with Lockheed’s L-1049 Super Constellations; which were placed on the London route in 1954. By 1960; the London route included Beirut, Zurich, and Frankfurt (which had replaced Dusseldorf. But in addition to an expansion of European service; Air India was turning its eyes eastward; to the Orient. Within a few years of full nationalization (1953 in parallel with Indian Airlines); Air India had opened routes to Singapore, Hong Kong, and Bangkok. The Singapore route was quickly extended to Australia (Sydney by way of Darwin); picking up traffic stops in Kuala Lampur and Jakarta along the way. Because of the violence in Egypt during the Suez crisis of 1956; Air India also developed an alternative route to Europe (Moscow by way of Tashkent); which could be extended to Western Europe if necessary. As the 50s drew to a close; Air India had grown from infancy into a full-fledged international carrier; with wide-ranging operations in Europe and Asia, as well as important toeholds in Africa and Australia. It was the latter that allowed Air India to take advantage of a lucrative business opportunity in the late 1950s; it leveraged its important position on the Kangaroo route to launch a revenue-sharing agreement with Qantas and BOAC (sort of a pre-precursor to today’s JVs) on service between Europe and Australia.
Meanwhile; Indian Airlines had been quietly dealing with problems of its own; mainly related to the fact that 8 airlines; with differing operations, had been squished into 1. Especially problematic was the redundancy in jobs; the airline had 2-3 times as many employees as necessary- resulting in a bureaucracy of staggering inefficiency. The attrition process would take many years and was never fully completed (see Air India’s current situation). Furthermore; the fleet of DC-3s was maintained haphazardly; with quality in certain shops shockingly bad (to put it mildly). This in and of itself was a more fundamental problem; as a carrier with a reputation for being unsafe could not be expected to gain flying passengers from the nation. When coupled with a bevy of unsafe airports (unpaved runways etc.), at least 17 resultant accidents involving DC-3s took place in the first 3 years of Indian Airlines. But while Indian Airlines grappled with these problems; they also moved to modernize the fleet. Five Vickers Viscount 768s were ordered for the main trunk lines and 8 de Havilland 114 Herons were introduced onto feeder routes.
During the 1950s; Indian Airlines set its network into a pattern that would be followed till the 1990s. The major trunk lines (especially those connecting ’œThe Diamond’- India’s 4 largest cities; Bombay, Calcutta (Kolkata), Delhi, and Madras) were operated with the largest aircraft. Initially, they were served with Vickers Vikings; but trunk routes quickly shifted to pressurized Viscounts in 1957. Secondary routes were served initially with DC-3s; though even these routes could be differentiated into two tiers (Tier 1: mid-sized Indian cities with modern airport facilities, Tier 2: small Indian towns with rudimentary airstrips). As Indian Airlines shifted into the 1960; their main fleet problem became dealing with a replacement for the ageing DC-3s. The venerable Dakotas were the only airliner that could operate on rudimentary grass and gravel strips; so common in India’s economically backwards Northeast region. Replacement for Tier 1 cities was easy but the fate of Tier 2 stations remained to be seen. Two manufacturers had offerings in the 40-44 seat turboprop market; the Fokker F-27 Friendship and the Avro 748 (later Hawker-Siddely 748s). The HS-748, with its low wing design, was considered the better aircraft for operations into Tier 2 markets, so India negotiated a deal from which HS-748s would be built at Kanpur, India. However, given India’s notorious problems with business, Indian Airlines also decided that it couldn’t wait for the HS-748s for Tier 1 replacement and simultaneously order F-27 Friendships as well. These aircraft were delivered in 1961 (a full 6 years before the first HS-748), and began plying routes across India. But even after delivery of both types; neither was able to replace the DC-3s on the smallest dirt and gravel strips; meaning that the DC-3s stayed in the fleet until 1974.
Air India Boeing 707 (VT-DJK) taken in London (LHR) in April 1969. Photo by Sir Hectimere.
While Indian Airlines was grappling with tough fleet choices; sister Air India entered the jet age. When the Boeing 707 entered service in 1958, they quickly revolutionized air travel with their (relatively) quiet and fast service. Air India was no different than most carriers, and placed their first Boeing 707 on the London route in April of 1960, and in May of the same year, hit a milestone with entry into service between London and New York; becoming the first Asian airline to serve NYC. Air India was considered one of the most luxurious airlines in the world; with its unique brand of Indian service creating popularity not only from New York to India; but even on the trans-Atlantic crossing. Much of Air India’s extraordinary service reputation during the 60s and 70s was the result of the work of Bobby Kooka, a marketing executive whose credits include the venerable Maharaja logo (the symbol of Air India).
By 1962, the 707 had replaced the Constellations (which were converted to cargo service) on the routes to Tokyo, Australia, Africa, and Europe; Air India was now an all-jet airline. Throughout the 1960s; Air India rationalized its network to fit the changing airline world. The advent of jet travel allowed more routes to be operated than ever before. This led Air India to de-couple much of its European network (though almost all flights ended in London), and add service to more points in the Gulf and beyond. By the second half of the decade; Air India had begun to shift its network to meet the needs of the changing overseas Indian population. Flights to Europe declined in importance, as the 707 allowed Air India to expand its network. The island destinations of Fiji and Mauritius, where Indians composed 50% or more of the populations, entered in 1964 and 1967 respectively. In 1968 they added Entebbe and Addis Ababa as African points; both containing sizeable Indian population. But these additions could not compare to the sudden boom in Indian population that was taking place just across the Arabian Sea. The Muslim countries of the Gulf were experiencing an oil boom, with their economies growing in the double digits each year. In order to service this growing wealth, these countries imported hundreds of thousands of laborers from South Asia to build up their infrastructure and serve as domestic servants. While these laborers were not supremely wealthy, they did constitute a source of new and growing demand. Recognizing the need for direct India-Gulf services; Air India began operating to many Gulf points as stand-alone destinations. Dubai, Abu Dhabi, and Dhahran soon showed up on the route map; and such was the demand for Air India’s services that they even chartered a Vickers VC-10 from BOAC to service Kuwait. Air India’s 11 Boeing 707s stayed in the fleet until the 1980s; operating on secondary routes and serving as a valuable tool in opening new services.
Air India Boeing 747-200 (VT-EBO). Photo by Savvas Garozis.
Indian Airlines too was quick to enter the Jet Age. The Friendships had been successfully deployed on secondary routes, but it had quickly become apparent that the Viscounts were far too small for their main trunk routes. Two choices were possible; the British Trident and the French Caravelle. The Caravelle; with its bold rear-engines was the world’s first short-haul jet and it had served Air France with distinction. The Trident, on the other hand, was a paper airplane that carried only a few more passengers than the Caravelle with far more inefficiency. The Caravelles entered service on Indian Airlines’ trunk routes by 1964, equipped with 89 all-economy seats. In spite of the Caravelle’s extraordinary performance (Indian Airlines achieved annual utilization of almost 3,000 hours per aircraft- among the best in the world), problems with accidents persisted; and Air India lost 2 Caravelles in 1966. By 1968/69 Indian Airlines was in a severe capacity crunch (though the HS-748s helped some); further exacerbated by extraordinary demand on their trunk routes (which the Caravelles couldn’t fill). So in 1970, Indian Airlines won approval from the government to order a larger jet. The 125 seat Boeing 737-200 won the contract and 7 frames were ordered in 1970. However, this order was not without controversy; as the Douglas DC-9 and the BAC 1-11 were both in contention. The complicated and messy battle ended with the 737-200’s selection; and Indian Airlines received an aircraft that would remain the workhorse of its fleet into the 90s.
Thus concludes part one of The Air India Story; which covered the dual story of Air India and Indian Airlines from ~1930 till 1970. Part 2 will cover the B-747 era, as well as Indian Airlines into the 2000s. Part 3 will cover the current situation at Air India and its possible solutions
Image Citations: de Havilland from Air India Route map from Wikipedia Constellation by J. Roger Bentley Boeing 707 by Sir Hectimere Boeing 747 by Savvas Garozis
It is guest blogger time once again. Today I am happy to have Courtney who is the co-creator of the Airplane Geeks Podcast, founder of AirlineEmpires.net, currently works for a commercial aircraft OEM, and is a self-proclaimed stud muffin (he added that last part). He takes a look at what many of us did when younger — building our own airlines. My first attempt at creating my own airline was playing Aerobiz on the Super Nintendo. It moved to pretty much every other computer came. More recently, I got obsessed with other computer airline games and started losing valuable blog time, so I had to stop. I always thought how cool it would be to create my own, but didn’t have know-how or time. Luckily for us, folks like Courtney did and he explains his path in his own words:
A special AirlineReporter.com livery I made on an Airbus A330 for an online airline game. Yes, I am a huge nerd.
It’s a prerequisite of Airplane Geekdom that you spend hours and hours drawing out the plans for your own airline at a young age. I finally succumbed to the temptation when I was 12. With my AeroTrader in one hand, and blank paper in the other, I chose 2 old Piper Navajo’s priced at about $250K each to run my Chicago Meigs-based airline. I built a schedule, had a full year’s worth of financials, and even started writing a business plan (to this day, I’m still convinced it would have worked if it weren’t for that pesky Mayor Daley). But just building the idea wasn’t enough. I wanted to know if it would work.
So, I built my first airline business simulation. It was nothing more than some rules, a 10-headed die, some paper, and a pencil. In retrospect, this is where I should have stopped, however, over the years I decided it would be so much better to automate it with a little bit of computer magic. So after failed attempts at multiple languages, I went to Barnes and Noble, bought a book on PHP and MySQL programming, and read it over the weekend. I made the browser type ’œhello world’ a couple of times and was off and running.
And so began my obsession with Airline Empires. A project that started because I wanted a way to find out if my airline ideas worked, was soon open to the public. The simulation floundered over and over again as the user base grew to 100, then 1,000, then 10,000, and finally peaked at 50,000 virtual airline entrepreneurs. One achievement I’m very proud of is that Airline Empires was the very first airline simulation which took into account competition in real time. In a nutshell, the fortunes of players’ airlines were dictated not only on their decisions, but on the decisions of the other players in the game. Sounds simple, but the complexities of it are mind boggling.
The problem with the game is that it never really was a game; It was as realistic a simulation as I could build. As airline investors know, realistic airline simulations aren’t much fun, and as close as I tried to make my simulation to reality, the true reality was that if you had 50,000 airlines, nobody made money. So I struggled with angry players, competing spin-offs, and a lack of time. Largely, the project has cost me thousands of dollars over the past 10 years, with not much more than disappointment and frustration.
Airline Empires wasn’t a complete bust. The techniques I learned from an airline perspective have served me well as I’m now paid to create airline business models, which is more of a fluke than a direct result of Airline Empires. What I’m most proud of, however, isn’t the simulation itself, but the advertising for it. Having learned some rudimentary Flash programming, I decided to put together a bit of a trailer for the game. It was my homage to airline history, and it quickly became more popular than the game itself. And so, as a sort of eulogy to the last 10 years that was Airline Empires, here is a look back at some of the failed airlines through the years. Enjoy.
You can follow Courtney on Twitter @miller22. Airline Empires is still being actively developed by people who know what they’re doing and you can find the game at AirlineEmpires.org.
Logos of different South African airlines. Image made by Kyle Hwang.
GUEST BLOG (By Kyle Hwang, intro by David): From time to time I will have guest bloggers talk about something they specialize in. Recently I was connected with Kyle who is an 18 year old student living in Pretoria, South Africa and attending University of Pretoria studying BSc Actuarial and Financial Mathematics.
He enjoys plane spotting, even though the closest major airport is OR Tambo, which is a 45 minute drive. When he has free time, he loves designing airline liveries and has quite the collection. Here are his thoughts on airlines in South Africa, in his own words:
So you might think that South Africa is a rainbow nation and not ready to host a World Cup. But either way, it has a rather rich and diverse aviation world. Here’s a quick look at the airlines
SOUTH AFRICAN AIRWAYS (SAA):
South African Airways is the national flag carrier of South Africa. SAA is one of six airlines in the world to fly to all continents of the world. Clearly the dominant airline at OR Tambo International Airport, their fortress. SAA has a 4 star Skytrax rating and is also a member of Star Alliance.
Besides the multi coloured Ndizani livery that bought the national Olympic team to Atlanta in 1996, the airline has not had a single special livery except the Star Alliance planes. Oddly enough, SAA is also not the official airline of the FIFA World Cup.
SAA is however pretty infamous on their home turf. Rivals Kulula.com have made SAA pay several anti-competitive fines. SAA was also blamed for the shut down of Nationwide Airlines.
SAA CEO’s have also not had one of the best rides. Andre Viljoen is generally a nuisance in the public’s eye, receiving many letters to retire. Viljoen was however the pioneer of SAA’s Airbus fleet refurbishment program. Khaya Ngqula, Viljoen’s predecessor had to retire because of mismanagement (fraud in my opinion!). He has also been the one taking credit for Viljoen’s Airbus program which proved to be quite successful.
Current CEO Siza Mzimela seems to bring the airline some hope. Former CEO of South African Express (SAA’s strategic partner) may restore the airline to their former glory (SAA won the best Business class seat award in 2004 and 2nd best Business class in 2005).
SOUTH AFRICAN EXPRESS (SAX)
Having revamped their logo recently, SAX is having a much better independent-from-Mother-SAA feel. You can consider SAX as a Southwest/Frontier African equivalent. SAX offers their passengers meal boxes on their domestic flights but here comes the catch- your paying sky rocket fees for a LCC…
SOUTH AFRICAN AIRLINK
The Hummingbirds is what I call them. They literally crashed into a school ground last year and had 3 accidents in a time span of 4 months. With the possibility of the airline closing down, Airlink employees quickly wrote some comments on Facebook hoping that it would save their airline. As a result, more journalists pointed fingers to Airlink’s then rapidly shrinking reputation. Will The Hummingbirds ever be successful? If the day arrives when SAA brings SAX and Airlink back under their wing.
MANGO
You cannot miss Mango’s B737-800 from the ground. They are mango coloured! Mango is SAA’s response to the flood of low cost carriers (LCC) in South Africa. Mango took SAA’s cabin and put Mango logos all over it, like a real cheap LCC.
Also, their inflight magazine is called “Juice.”
1TIME.CO.ZA
If it wasn’t for their sponsor planes, you could also spot 1time from the ground. The are red, hot red! The first time I flew 1time (1time.aero back then) I flew the Nando’s plane. It was red and decorated with Nando’s chicken catch phrases. (“This plane flies at 30,000 feet and 60,000 chicken feet”). 1time’s planes now consists of the Avis, Pushkin Vodka (not for sale to persons under 18!), the Smiley Plane and Go Zanzibar. “More nice, less price,” is their slogan.
KULULA AIRLINES
Definitely one of the success stories of South African Aviation. Flying 101 has caught international attention and even on Airline Reporter. Kulula is actually a British Airways Comair initiative that has bought the spark back into the LCC industry. Kulula has also been voted best LCC to Africa.
Their liveries include Flying 101 of course, Jetsetter, Camoplane, Zippy plane, da udder plane, THIS WAY UP and 3 World cup celebrating planes sponsored by Europcar.
Kulula was asked by FIFA to remove the “Unofficial National carrier of the You-know-what” titles because for copyright infringements.
BRITISH AIRWAYS
What?! An European carrier in the midst of South African unknowns? Comair operates plenty of domestic flights for BA. The only catch is that your are bound to be flying some old 737 that makes a lot of noise.
So hopefully when you watch the soccer on TV you will remember that South Africa also has a pretty rich aviation industry!
