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Aviation History
1989
1989 - 1134.PDF
from Delhi to the Himalayas; the package-tour holidays; a courier service; and a rent-a- plane scheme which enables an aircraft to be chartered by, say, a group of tourists. Behind the glossy image, however, the airline is heading rapidly towards a financial crisis, because its expansion policy is in danger of backfiring. In India, the airline is widely believed to have debts of almost 600 million Rupees (about $40 million). Vardhan disputes this and blames depreciation of the Rupee against the Deutschmark for much of the problem. Hindustan Aeronautics claims that 400 million Rupees is still outstanding following Vayudoot's acquisition of the Dorniers in 1984/5, but Vardhan puts the figure at 250 million Rupees. Other creditors include Dornier, which is owed DM1 million ($535,000) for spare parts; Indian Airlines (about 100 million Rupees for maintenance work on 748s and F.27s); Indian Oil; the International Airport Authority of India; the Government of Bangladesh; and Druk Air of Bhutan. In eight years of operation, Vayudoot has made a loss in all but three (which showed minimal profits). The accounts show total estimated losses amounting to some 175 million Rupees. "The fare structure is very low", says Vardhan, "but we have approached the Indian Government to revise the fares to a realistic level." That means an increase of about 20 per cent. Vayudoot has also written to the Government requesting 160 million Rupees of subsidy for Government- instigated loss-making routes, but the ques tion has yet to be resolved. Funding shortage Vardhan is finding himself in an increasingly difficult position. On one hand, he needs to keep a high profile at the Ministry of Civil Aviation; on the other, his airline is so short of funds that it cannot even pay its telephone bills. (Several tele phones have been cut off during the past year because of non payment.) More important, Vayudoot finds difficulty paying for spare parts. Dornier claims that since introduction of the Dornier 228s during early 1985, only DM2-5 million ($1-3million) worth of spares has been ordered by Vayudoot, to support a fleet often aircraft which have been flying between 2,500hr and 2,800hr per year. Moreover, spares were only acquired with Vayudoot operates with high load factors, but low fares and no timetable three of the ten aircraft. Since then no spares have been ordered in the normal way. Every request has been an emergency "aircraft on ground" (AOG) order, and these have been for consumables only. Vayudoot has now taken up so much credit with Dornier that further deliveries of spares have been temporarily suspended. Cannibalisation "Our inventory of spares is worth almost eight crores of Rupees [about US$5-3 million]. That is nearly 18 per cent of the fleet cost", says Vardhan. Dornier disputes this, claiming that Vayudoot's stock of spares is worth no more than 2 per cent to 3 per cent of the value of the aircraft. At any rate, it appears that Vayudoot must have resorted to some form of cannibalisation—borrowing parts from aircraft that are not airworthy, and using them to keep the rest of the fleet flying. Vardhan admits that parts have been removed from several Dorniers, but denies that this is cannibalisation. "It is the wrong notion. It is not that we are cannibalising them. The point is that when there is avail able inventory we send it for repairs and by the time we get it back we put it back. This Vayudoot will acquire an increasing number of F.27s from Indian Airlines kind of process goes on in any airline all the time. It is not cannibalising." Vardhan states, however, that the appointment of a new chief of engineering at Vayudoot bodes well for the future. Pilot error, exacerbated by ten-hour duty cycles and flying into inadequate airfields, has also led to depletion of the fleet. Vardhan admits to a bad chapter of eight accidents last year. Three F.27s had serious accidents. One crashed, killing 34 people, another made a wheels-up landing, and the third was nearly damaged beyond repair when a wing hit a catering van on the apron at Calcutta. The depleted fleet is inadequate to serve Vayudoot's actual network let alone the 99 stations to which it operates in theory. The Ministry of Civil Aviation wants the airline to serve no fewer than 400 points all over the subcontinent, but many have been inau gurated only to have flights stopped again. Between 30 and 40 services shown on the route map exist only on paper. Pressure is often placed on Vardhan by politicians anxious for services to be started to their districts, but the flights stop when the poli ticians fall. Vayudoot is an unscheduled airline. No timetable is available. Despite all this, with the backing of key politicians Vardhan may achieve his grand plans for the future. New air craft acquisitions are being con sidered, with the ATR42, ATP, Dash 8-300, and the Fokker 50 in the hunt for orders. The winner is likely to be the one offered with the best financial package or barter deal, because the airline does not have hard currency. Computerisation and a communication network are also being considered. The glossy face of Vayudoot may live on for some time yet. C 36 FLIGHT INTERNATIONAL, 22 April 1989
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