(Source:  New York Times – Wheels Blog)

There has been a lot of talk this year about American cars. Bailout money has gone to companies with the goal of preserving the jobs of Americans who make American cars. Legislators have debated cash-for-clunker bills that would provide incentives for buying new American cars. Foreign investments have been scrutinized to see whether they would further the goal of producing more American cars.

So what’s an American car?

In today’s economy, propped up by global investments and free-trade zones, it isn’t so easy to tell. As Cheryl Jensen points out in her introduction to ournew interactive resource detailing where cars and trucks are made in North America, “Which is the more American product, a Honda Accord built by Ohioans for a company with its headquarters in Japan, or a Ford Fusion built in Mexico for a corporation that is based in Michigan?”

Indeed, under the North American Free Trade Agreement, vehicles built in Canada and Mexico can be considered “domestic.” So don’t tell your flag-waving super-patriot neighbor that his Chevy Impala, the one with the “Buy American” bumper sticker, came from Ontario.

To help cut through some of this confusion, we’ve put together an interactive map that lists every model built in the United States (with separate lists for Canada and Mexico). If you click the model name, you’ll see where it was assembled, whether that plant is unionized and whether the engines and transmissions are from the U.S. as well.

This information, gathered by Ms. Jensen, is up to date as of this weekend, but will of course be changing as automakers like G.M. close more plants, eliminate some models and shift production around. The Times will work to keep this resource up to date in the coming months.

If you’ve ever wondered where that car came from, now you can know.

Click here to read the entire article.

The Insurance Institute for Highway Safety recently reported that motorcyclists who ride racing style motorcycles known as "supersports" have driver death rates "nearly 4 times higher than motorcyclists who ride all other types of bikes." Capable of extreme acceleration and speed, supersports are particularly popular with young riders.

The Bureau of Transportation Statistics of the Research and Innovative Technology Administration today released “Motorcycle Trends in the United States”, a special report on the current and emerging trends involving street-legal motorcycles.  During the last decade there has been a significant increase in the number of motorcycle sales and registrations in the United States.  At the same time there has been a shift in the demographics of motorcycle users and increased focus on motorcycle safety issues. This report focuses on the current and emerging trends of vehicles, vehicle registrations, owner demographics, training and safetyinvolving street-legal (on-road and dual-purpose) motorcycles. Seen below is an extract of the report’s sections.

Vehicles

In the United States, although no universal or official definition exists, a motorcycle is a two- or three-wheel powered vehicle designed for on-road, off-road, or dual-purpose (on and off-road) use. On-road and dual-purpose motorcycles must meet federal and state certification standards and be licensed (registered) for use on public roadways, although light powered two-wheel vehicles with engines smaller than 50cc, known as mopeds or light scooters, as well as motorized bicycles, are typically allowed to operate on public roadways without registration. Motorcycle designs, technologies, and gear are expanding and evolving rapidly. While there is no universal standard, street-legal motorcycles in the United States are often grouped as shown in Box A. Laws regulating motorcycle equipment requirements for on-highway (street-legal) or off-highway operation, and insurance, age, licensing, and training requirements, vary across the U.S. ¹

Vehicle Registrations and Sales

Because the majority of motorcycles in use must be registered for operations on public highways, registrations provide some indication of the number of motorcycles in use on public roadways each year. Motorcycle registrations in the United States have grown each of the past 10 years, from 3,826,373 in 1997 to 6,678,958 in 2006—a 75 percent increase overall.² Sales of new street-legal motorcycles grew even more sharply over the same period, from 260,000 in 1997 to 892,000 in 2006 (a 243 percent increase), but declined slightly to 885,000 in 2007 (table 1).^{3 , 4}

Motorcycle engine sizes and motorcycle weights are increasing in the United States. While new sales of motorcycles with engines of 750cc or more increased 54.0 percent in 2003 compared to 1998, and those with midsized engines of 450-749cc increased 16.6 percent, sales of motorcycles with smaller engine sizes decreased during the same period, especially in the midsized 350-449cc category, which declined 60.1 percent (table 2).

Between 2005 and 2007, sales of sport bikes (including supersport bikes) increased from 16 to 19 percent of all motorcycle sales (including off-road bikes, which are not distinguished from on-road motorcycles in the available total sales data); sales of touring bikes increased from 13 to 15 percent; sales of dual-purpose bikes increased from 3 to 4 percent, while sales of off-highway bikes decreased from 27 to 22 percent of total motorcycle sales (table 3).

During the first three quarters of 2008, total new on-highway (i.e., street-legal) motorcycle sales (excluding dual purpose motorcycles and scooters) declined 2.1 percent from the corresponding period in 2007, with reported sales of 548,747 in 2008 compared to 560,529 in 2007. Dual purpose motorcycle sales increased 29.4 percent, with sales of 39,805 units during the first three quarters of 2008 compared to 30,759 units during the same period of 2007. Concurrent with record fuel prices in 2008, scooter sales increased 50.6 percent. There were 69,227 units sold in the first three quarters of 2008 compared to 45,975 units sold in the first three quarters of 2007. Combining data for on highway motorcycles, dual motorcycles, and scooters gives total sales of 657,779 during the first three quarters of 2008 as compared to 637,263 during the same period of 2007, a modest 3.22 percent increase in units sold.⁵

Motorcycle Owner Demographics

Survey data from the Motorcycle Industry Council on motorcycle owner demographics for the 1985 to 2003 period reveals a shift towards older owners. The median age of owners increased from 27.1 years in 1985 to 41.0 years in 2003. From 1985 to 2003, the percentage of owners 40–49 years old increased from 13.2 to 27.9 percent, and the percentage of owners 50+ years old increased from 8.1 to 25.1 percent (table 4). Also, survey results for 2003 indicated that 90 percent of owners were male, while survey results for 1998 indicated that 92 percent of owners were male, a slight—but probably not statistically significant—trend consistent with growing female ownership.

Training

The Motorcycle Safety Foundation (MSF) offers motorcycle rider education and training programs and courses, and supports governmental programs by participating in research and public awareness campaigns and providing technical assistance to state training and licensing programs. ⁶ The MSF reports that about 4.5 million riders have graduated from their rider training courses since 1974. The Motorcycle Industry Council cites MSF data showing that the number of students trained in MSF courses has increased steadily from about 130,000 in 1996 to about 370,000 in 2006. During the same period, there has been an increase in MSF course training sites from about 875 to about 2,125. In 2006, there were just over 9,000 MSF certified RiderCoaches (experienced motorcyclists who complete an intensive preparation course to become trainers) compared to only 3,500 in 1996.

Most recently, the National Traffic Safety Division (NTSD) of the Transportation Safety Institute (http://www.tsi.dot.gov/), Research and Innovative Technology Administration, U.S. Department of Transportation developed a course on motorcycle safety program coordination (MSPC) to train motorcycle safety program managers at the state and federal level on the best practices, program fundamentals, and latest strategies for effective motorcycle program management. The MSPC course is sponsored by the National Highway Traffic Safety Administration (NHTSA) and intended to provide training to State Highway Safety Office program personnel and NHTSA Regional Program Managers to enable them to better facilitate and support a comprehensive motorcycle safety program in their state or region. The second of two pilot courses was completed in September 2008, with final course revisions based on experience with the pilots to be completed after that.

Safety

The growth in motorcycle sales and registrations in the United States has been accompanied by an increase in accidents, property losses, injuries, and fatalities involving motorcycles. As shown in table 5, from 1997 to 2007, the annual number of motorcyclist fatalities increased from 2,116 to 5,154 (a 144 percent increase), and the estimated number of motorcyclist injuries increased from 53,000 to 103,000 (a 94 percent increase).⁷

Although motorcycle registrations and vehicle-miles traveled both increased substantially from 1997 to 2006 (the last year for which registration data are currently available), these exposure measures do not account for all the growth in motorcyclist fatalities, because during that period, motorcyclist fatalities increased proportionately more than registrations and vehicle-miles traveled. From 1997 to 2006, annual motorcyclist fatalities increased from 2,116 to 4,837 (a 128.6 percent increase), while fatalities per 100,000 registered motorcycles increased from 55.3 to 72.3 (a 30.7 percent increase), and fatalities per million motorcycle miles of travel increased from 21 to 39 (an 85.7 percent increase).

Also, during that same period, estimated annual motorcyclist injuries increased from 53,000 to 88,000 (a 66 percent increase), while estimated injuries per 100,000 registered motorcycles declined from 1,374 to 1,311 (a 4.8 percent decrease), and estimated injuries per million motorcycle miles of travel increased from 522 to 707 (a 35.4 percent increase).

Analysis of factors accounting for increasing motorcyclist fatality rates is beyond the scope of this brief overview of motorcycle trends, but one trend of concern to public health and safety experts is the relaxation of motorcycle helmet laws (See Box B).^{8 , 9}

Another emerging trend of concern to public health and safety experts is the growing popularity of racing-style motorcycles known as supersports, which have high power-to-weight ratios and are capable of extreme acceleration and speed (160+ mph). Although designed for the racetrack, supersport motorcycles are marketed and sold to the general public and have become especially popular among young riders. On September 11, 2007, the Insurance Institute for Highway Safety (IIHS) released a report showing that “motorcyclists who ride supersports have driver death rates per 10,000 registered motorcycles nearly 4 times higher than motorcyclists who ride all other types of bikes.”¹⁰ The IIHS report also noted that among fatally injured motorcycle drivers, those riding supersports are the youngest, with an average age of 27. For both 2000 and 2005, the death rate for riders of supersport bikes is twice that of sport bike riders and four times that for riders of other motorcycle types (See table 6).

PDF version of the full report, complete with Tables referenced above, can be found at:

http://www.bts.gov/publications/bts_special_report/2009_05_14/index.html

July 29, 2009

8:00 a.m. – 3:00 p.m.

Embassy Suites DC Convetion Center

900 10th Street NW

Washington, DC 20011

Register HERE for this Forum

On July 29, 2009, at the Embassy Suites DC Convention Center, Washington, DC, The Infrastructure Security Partnership (TISP) hosts its Summer Forum on Enhancing Infrastructure Resilience through Planned Investment Strategies with a focus on the Transportation and Energy CI/KR Sectors. Resilience is more than a buzzword used to describe the strength of community. When considering the subject of infrastructure protection, we ignore many other crucial aspects of securing the nation and its critical infrastructure. Infrastructure resilience addresses the development and implementation of exercised measures and policies to reduce the disaster and devastation impacts of all types of hazards to manageable effects that can be quickly overcome. Investment strategies that take into consideration the reduction of risk, stabilization of the work force, improved efficiencies (such as improvements to the road and rail transportation system that result in faster cargo supply chains), redundancy, business continuity and quick recovery from a catastrophic event will realize significant returns to stakeholders and investors. Infrastructure operations, safety, maintenance, protection and resiliency are so closely intertwined in today’s world that they must all be part of any investment strategy if it is to be cost-effective and long-lasting.

Facilitating public and private sector discourse regarding investment strategies for infrastructure resilience is essential to the TISP mission to lead collaborative effort that advances the practice and policies of infrastructure security and resiliency. We will bring together decision makers, policy analysts, and experts in transportation and energy infrastructure resilience and planning. This forum is designed to encourage audience participation, with a morning discussion of cross-sector topics and with two afternoon breakout sessions (one for transportation and the other for energy sectors).

The issues and recommendations identified by the Forum will be documented and distributed via a summary report to of all participating organizations and an article published in the TISP e-Newsletter and shared with infrastructure resilience stakeholders.

Registration Rates

TISP Dues-paying Members: $75.00

Public Agency Rate: $75.00

TISP Partners (non-paying members): $100.00

Hotel Location and Directions

Embassy Suites DC Convention Center

900 10th Street NW

Washington, DC 20011

202-719-1423

Map and Directions

Register HERE for this Event.

For more information about TISP and this Forum, contact Mr. Bill Anderson, 703-549-3800 Ext 170. For assistance in registering for this Forum contact Carie Losinski, SAME Online Registration Specialist, at 703-549-3800, Ext. 154.

Friday, June 19, 2009 – ISSN 1529-1057

AVIATION

1) Aircell Gets FAA Approval for Wi-Fi System

Link to story in The Denver Post:

http://www.denverpost.com/headlines/ci_12625367

Link to news release from Aircell:

http://news.prnewswire.com/DisplayReleaseContent.aspx?ACCT=104&STORY=/www/story/06-18-2009/0005046431&EDATE

CARTOGRAPHY

2) Oops! ‘Ferry Crash’ Unstitches Google Maps

Aerial photo appears to show boats crashing and another one sunk in Sydney.

Link to story in The Sydney Morning Herald:

http://www.smh.com.au/technology/technology-news/oops-ferry-crash-unstitches-google-maps-20090618-cl13.html

ELECTRONIC TOLLING

3) Ohio Turnpike Still a Hole in Regional Tolling

Link to AP story:

http://ydr.inyork.com/ci_12647923

GPS / NAVIGATION

4) US Air Force Reviews Reliability of GPS Satellite Models

Link to story in The Wall Street Journal:

http://online.wsj.com/article/SB124543128766431947.html

OTHER

5) New Jersey Turnpike Wants to Roadblock ‘Exit’ Brew

Toll road asks brewery to halt marketing of beer.

Link to story in The Philadelphia Inquirer:

http://www.philly.com/dailynews/features/20090619_N_J__wants_to_roadblock__Exit__brew.html

Link to story in TOLLROADSnews:

http://www.tollroadsnews.com/node/4204

Link to further information from Flying Fish Brewing Co.: http://www.exitseries.com/

RAILROADS

6) Public Rail Crashes Probe Ruled Out in UK

Link to Press Association story:

http://www.google.com/hostednews/ukpress/article/ALeqM5jfPPY2c_mkMzD7_ZuqJFy-0OHCow

SAFETY / SECURITY

7) FOI: Fear of Information

Releasing information on airport staff names salaries is a security concern says city of Houston.

Link to commentary in the Houston Chronicle:

http://www.chron.com/disp/story.mpl/metropolitan/casey/6487473.html

Link to story in Texas Watchdog:

http://www.texaswatchdog.org/2009/06/airportpayroll1/

TRANSIT

8) First Amendment Implications for Transit Facilities: Speech, Advertising, and Loitering

Link to further information from the Transportation Research Board:

http://www.trb.org/news/blurb_detail.asp?id=10528

TRAVELER INFORMATION / TRANSPORTATION MANAGEMENT

9) Second i-Travel Workshop Held

Link to further information from ERTICO-ITS Europe:

http://www.ertico.com/en/news/ertico_newsroom/second_i-travel_workshop_held.htm

VEHICLES

10) Feds Roll Out Consumer-Friendly Tire Label Rules

Link to story in the Los Angeles Times:

http://latimesblogs.latimes.com/uptospeed/2009/06/car-tires.html

News Releases

1) New York State Announces Free Statewide 511 Travel Information Phone Service

2) Number of States Banning Texting While Driving Doubles in ‘09

Upcoming Events

TISP Summer Forum: Enhancing Infrastructure Resiliency Through a Planned Investment Strategy – July 29 – Washington, DC

http://www.tisp.org/index.cfm?cdid=11687&pid=10231

Friday Bonus

If you won’t slow down in a work zone, perhaps this will encourage you to take your foot off the gas.
http://www.howwedrive.com/2009/06/09/the-next-great-idea-in-work-zone-safety-engineering/

Today in Transportation History

1934 **75^th anniversary** – The Communications Act of 1934 became law. The act created the Federal Communications Commission.

http://www.fcc.gov/Bureaus/OSEC/library/legislative_histories/47.pdf

=============================================================================================

The Transportation Communications Newsletter is published electronically Monday through Friday.

To subscribe send an e-mail to: TCNL-subscribe@googlegroups.com

To unsubscribe send an e-mail to: TCNL-unsubscribe@googlegroups.com

TCN archives: http://groups.yahoo.com/group/transport-communications

Questions, comments about the TCN? Please write the editor, Bernie Wagenblast ati95berniew@aol.com.

© 2009 Bernie Wagenblast

(Source: Autoblog, Washington Post,  Detroit Free Press, AFP via Google)

Image Courtesy: Jalopnik

Clears Senate

After narrowly surviving an attempt by Sen. Judd Gregg, R-N.H. to strip it from a war-spending bill, the Cash for Clunkers program passed the Senate yesterday evening. Well, the $106 billion war-spending bill passed the Senate on a 91-5 vote, but the $1 billion scrapping program earlier survived Sen. Gregg’s attempt to have it removed and thus passed, as well. Now the bill makes its way to President Obama, who is expected to sign the bill into law, after which the U.S. Transportation Department reportedly has one month to figure out how the Cash for Clunkers program will be run. Since Congress reduced funding for the program from $4 billion to just $1 billion, it’s expected that the money will run out long before the program is scheduled to end on November 1.

“We are gratified that the Congress delivered on this administration priority, and President Obama looks forward to signing it into law,” according to an administration statement.

Details, Details, Details,

Vehicles purchased after July 1 will be eligible for the refund vouchers worth as much as $4,500 to turn in gas guzzlers and buy new cars that are more fuel efficient.

The agency in charge of administering the program, the National Highway Traffic Safety Administration, will work out all the details within 30 days of enactment, according to Rae Tyson, spokesman for NHTSA.

Congress predicts this will result in the sale of about 250,000 new vehicles. The funding is good only until Nov. 1 and could run out before that. In that case, the voucher pro gram — unless Congress ap propriates more — would end.

Consumers would be able to start using the vouchers as soon as the National Highway Traffic Safety Administration finalizes the rules — a process that must conclude within 30 days of the president’s approval.

Under the program, trade-in vehicles, 1984 models or newer, must have average fuel economy of no more than 18 miles per gallon. And the new car or truck must get better gas mileage than the one that was scrapped.

The payoff grows depending on the difference in the fuel efficiencies of the old and new cars. For instance, a new car getting at least 4 more miles per gallon than the old car will be eligible for a $3,500 voucher. A new car getting at least 10 more miles per gallon would get a $4,500 voucher.

To guarantee vehicles are actually roadworthy — and not just sitting on cinder blocks — trade-ins must be registered and insured to the same owner for at least a year.

Kudos & Pats in the Backs

Image Courtesy: Apture

Cash for clunkers proponents in Congress said the subsidies will spur sales.”The simple fact is that we need to get Americans into car showrooms and this is the bill that will do it,” said Rep. Candice Miller, R-Mich., in a statement.

Sen. Debbie Stabenow, D-Mich., said the program will boost jobs in auto states. “This program will provide an economic stimulus at a time when hardworking families need it most,” Stabenow said in a statement.

GM said it had decided to keep 60 of the more than 1,000 dealers with whom it had sought to terminate agreements. The reversals were made after the automaker corrected financial information that was used to evaluate which stores to keep.  Dealers applauded the Senate’s action yesterday, and some got additional good news.  John McEleney, chairman of the National Automobile Dealers Association, hailed the measure, saying it “will boost consumer confidence, get the economy going again and reduce our dependence on foreign oil. Congress is giving consumers a strong incentive to replace their older vehicles with new, more fuel efficient cars and trucks.”

Transportation Secretary Ray LaHood said “The program is an important step forward for America. “It provides incentives for consumers to buy new, more fuel-efficient cars and trucks, providing a boost to the auto industry and protecting jobs, while limiting fuel use and greenhouse gas emissions.”

The legislation comes with number-one US automaker General Motors in bankruptcy and Chrysler emerging from court protection under a government-backed alliance with Italy’s Fiat in the face of plunging auto sales.

Cash for Clunkers Update from Europe (Channel 4 via Autobloggreen)

Several other countries, such as China and Italy, have offered similar trade-in vouchers. And lawmakers point to the success of Germany’s program as indication that vouchers can turn dismal auto sales around.  At the end of the program’s first month, sales in Germany were up 21 percent from a year before. During the same period, U.S. sales slumped 41 percent. Now,  a leading provider of automotive data and intelligence says the European motor industry is showing signs of recovery following the introduction of scrappage schemes on the continent.  According to a new study by Jato Dynamics, the European automotive market may be rebounding ever so slightly from its alarming lows of early 2009.

Though new car purchases are down by just over 13 percent year-on-year, there was actually a mild 2.4 percent improvement in May over April. The German market is now 39.7% up on May 2008 – a 20.3% improvement over last month’s figures. France, meanwhile, is up 11.8% over the figures for April.  “If Germany provides a template for the other markets where scrappage schemes have been introduced, we may be at the very beginning of a period of recovery in Europe. It’s far too early to know what the sustained effects of the incentives will be, but at a time when the industry needs to see some rays of hope, it’s encouraging to witness some improvement ” says David Di Girolamo, Head of Jato Consult. Interestingly, small, fuel efficient hatchbacks are performing better than the rest of the market, which is thought to be due to the various scrapping schemes in Europe.

The US market has steadied somewhat from lows earlier this year but the sales pace in May remained 33.7 percent below that of one year ago.  Let’s hope the American consumers will follow their European counterparts in boosting the vehicle market> Eeven if it is only a liitle, the market can use any push to build its recovery.

Image Courtesy: NHTSA, USDOT

The U.S. Department of Transportation today proposed a new, consumer-friendly replacement tire label which would include, for the first time, information about the tire’s impact on fuel economy and CO2 emission reductions. Tires with lower rolling resistance – and proper inflation pressure – can contribute to improved fuel economy (Click here to read the proposal.)

In addition to the new fuel efficiency ratings, the proposal by the National Highway Traffic Safety Administration (NHTSA) also would provide consumers with two other key pieces of tire performance information – wet weather traction and tread wear. All three ratings would be prominently displayed on a removable label attached to the replacement tire at the point of sale.  NHTSA is required by the Energy Independence and Security Act of 2007 to issue a final rule by December 2009.

The new, three-tiered ratings also will appear on safercar.gov to help consumers in compare ratings as they shop for new tires.

Making sure consumers know which tires are the best gas savers could take up to a 2% whack out of the 135 billion gallons of fuel the nation consumes every year, estimates the National Highway Traffic Safety Administration (NHTSA).

The removable label would be affixed to the tire, but since many consumers never see replacement tires that go on their cars, it would be available online, as well.  NHTSA already has lots of tire information on its SaferCar.gov website.

One of the main trade organizations for the tire industry, the Rubber Manufacturers Association, hasn’t taken a stand yet on the proposed federal rule, but supports the idea in concept.

You can see from the sample that the new label would include–for the first time–information about the tire’s impact on fuel economy and CO2 emission reductions, wet weather traction and tread wear.

NHTSA’s proposal would let consumers look at a single label and compare a tire’s overall performance as it relates to fuel economy, safety and durability, which should be pretty useful for consumers looking to buy a tire.

USAToday reports that the simplified labels have the blessings of an environmental group that has followed the effort. “Armed with efficiency ratings, consumers can choose replacement tires that can cut the gasoline consumption of their current car, minivan, SUV or pickup and save money with fewer trips to the pump,” said Luke Tonachel, vehicle analyst for the Natural Resources Defense Council in a blog note.

Since gas topped $4 a gallon last summer, more effort has gone into developing and marketing gas-saving tires. Goodyear says its new Assurance Fuel Max has 27% less rolling resistance than conventional tires. Michelin says its Energy Saver A/S is 8% more fuel efficient than other tires in its class.

While praising NHTSA for its efforts to push the new rating system, the Transportation Secretary Ray LaHood said in his blog “…proposal takes the guesswork out of buying the best tires for your vehicle.  Our proposal would let consumers look at a single label and compare a tire’s overall performance as it relates to fuel economy, safety and durability.”  He also noted that “while we’re talking tires, please remember that the best tires in the world will not keep drivers and passengers safe if they are underinflated or if vehicles are overloaded.”

For those interested in reading the proposal, click here.

(Source: Washington Post & Reuters)

General Motors executives will now fly commercial.

Image Courtesy: Autoblog

In a move that reflects the leaner company GM is seeking to become, the automaker on Thursday sought approval from a federal bankruptcy judge to terminate leases for all seven of its corporate aircraft, plus a hangar at a Detroit airport. Facing no objections, Judge Robert Gerber granted the request during a hearing in a Lower Manhattan courtroom that lasted less than 10 minutes.

“The new GM will have no jets — we’re all flying Delta,” GM spokesman Tom Wilkinson said in an interview.

The planes are leased from a division of General Electric and include five mid-range Gulfstream G350 business jets and two ultra-long Gulfstream GV jets, according to court documents.

Then-GM chief executive G. Richard Wagoner Jr. had been assailed by lawmakers at a hearing in November when he and other auto executives flew to Washington on private jets to ask for government funds. In March, Wagoner was pushed out by the Obama administration, which has pumped billions of dollars into GM and Chrysler.

In a recent court filing, GM said it was exercising “sound business judgment” in seeking to end the contracts. “The leases are not necessary or valuable to [GM’s] business activities,” the automaker said in the filing.

Corporate America has long argued that using private jets is a safety precaution and a way to maximize busy executives’ time by allowing them to avoid delays at crowded airports.

Chrysler also recently terminated its two aircraft leases. A spokesman for Ford, the only one of the Big Three Detroit automakers that hasn’t taken taxpayer funds, said the company is seeking to sell its five jets, which have been grounded since late last year. Ford’s chairman and chief executive have been chartering flights on an as-needed basis, the company said.

Click here to read the entire article.

Kingfisher Airlines of India promised passengers the royal treatment — flight attendants so comely they were called “flying models,” full meals even on short flights and curbside valets to carry their bags.

Image Courtesy: Apture - Kingfisher's Vijay Mallya

But how the mighty have fallen.

Short of cash and unable to pay its bills, the company has had to take on debt from India’s government-owned banks, pledge assets in exchange for loan guarantees, postpone delivery of new planes and search for a foreign investor.   Most symbolic, perhaps, instead of starting nonstop flights from India to California — as envisioned by the company’s flamboyant founder, Vijay Mallya — the airline last added a route from Calcutta to Dhaka, the capital city of Bangladesh.

Known as the “King of Good Times,” Mr. Mallya pursues a lavish lifestyle that includes a collection of hundreds of sports cars and a villa on the French Riviera. He built Kingfisher as a “premium” airline and, when passenger numbers were growing, placed big orders for planes, including five of the A380 superjumbo jets from Airbus, even though Kingfisher had never turned a profit.

Kingfisher lost 10.5 billion rupees, or $219 million, in the nine months that ended in December, the most recent figures available. India’s other large private airline, Jet Airways, reported a slight profit for the first quarter of this year, in part because of one-time tax credits. Kingfisher still owes $100 million to oil companies for jet fuel it bought in 2008, Mr. Mallya said. Those payments will be made by November.

Sorry State of India’s Aviation Business

Airlines around the world are suffering as businesses and individuals cut back on travel, but in India, by some measures, they are suffering more. And analysts say that in the months to come, Kingfisher, one of India’s top domestic carriers and one of the country’s most recognized brands, may be in for more pain than any other airline here.

Kingfisher’s troubles present a cautionary tale for investors and suppliers eager to do business in one of the few major economies still experiencing significant growth. Even as incomes and consumption continue to rise in India, success is not guaranteed — nor is a smooth ride.

Of the $9 billion that the International Air Transport Association estimates the global airline industry will lose in 2009, nearly a quarter will be lost by Indian airlines, which fly just 2 percent of the world’s passengers.

For India’s private airlines, “the next six to nine months are about survival,” said Kapil Arora, a partner with Ernst & Young’s aviation practice. To make it, they will have to cut costs relentlessly in marketing, technology and payroll, he said.

Even that may not be enough. After resisting for years, the Indian government is considering letting foreign airlines take a 25 percent stake in Indian carriers. But the rest of the world’s airlines are short of cash as well. “It’s going to take active government involvement” to keep India’s airlines in business, Mr. Arora said.

Image Courtesy: Extra Mirchi - A Kingfisher Promise

In an e-mail interview, Mr. Mallya brushed off suggestions that the company was struggling for survival. It will turn a profit in the next fiscal year, he said, and a $500 million loan, recently arranged by the State Bank of India and sold to an alliance of banks, is sufficient to keep the company going this year.

If that’s not enough, Mallya wants to proceed with his fleet expansion plans. Miranda Mills, vice president at Airbus, said the manufacturer had been in regular conversation with its Indian customers and was not worried about any of Kingfisher’s orders, including those for the A380.  “We work a long-term game,” Ms. Mills said. In the airline business, companies do not place an “order for the next year or two and then change your business model totally,” she said.

Unfortunately, that is just what the Indian government is encouraging airlines to do. “Individual customers have been thoroughly pampered all these years,” Praful Patel, the Indian civil aviation minister, said. Airlines need to redefine their business model, he said, and emulate no-frills carriers that are close to breaking even, like IndiGo and SpiceJet.

Indian airlines grew too much, too quickly during the recent boom, analysts say. At its zenith, the industry was adding six planes a month, when there was demand for only half that number, according to the New Delhi office of the Center for Asia Pacific Aviation, a consulting and research firm. To gain market share and attract customers who may never have flown before, airlines were pricing tickets way below cost.

Adding to their problems, Jet and Kingfisher made expensive acquisitions in 2007 — Jet Airways bought Air Sahara and Kingfisher Airlines bought Air Deccan. Analysts say that the airlines paid too much for the acquisitions and have taken too long to absorb the operations they acquired.

Next, surging fuel prices forced up ticket prices just as the global slowdown cut business and leisure travel. To make things worse, Indian airlines face much higher fixed costs than carriers in many other countries, like fuel taxes that can be five times the global average.

In India, “the big boys today have huge debts, massive fleets, are confronted with a marked slowdown in domestic and on the international side,” said Kapil Kaul, chief executive for the Center for Asia Pacific Aviation in India. And, he said, “there are virtually no funds available.”

While Mr. Patel, the civil aviation minister, would not comment on individual airlines, he did say that the government would not block further consolidation or prevent a carrier from closing. Many airlines should have been better prepared, he added. “Some of these guys in the best days didn’t go big time to the markets and raise money,” he said.

But the latest Indian Government statistics show the country’s domestic passenger market shrunk 11% in May. The civil aviation minstry statement says India’s airlines carried 3.9 million passengers, up from 3.3 million passengers carried in April.  Kingfisher retained the number one position it assumed in April, carrying 1 million passengers for 26% marketshare. Characteristically, Mr. Mallya is undeterred. Kingfisher Airlines “enjoys business from both” low-fare and premium passengers, he said, “which is one of the reasons why Kingfisher Airlines flew more than a million passengers in May 2009.”  But recent attritition of the top management team indicate there maybe some cause for concern.  Ramki Sundaram, executive vice-president at Kingfisher Airlines Ltd and former chief executive officer of Deccan Aviation Ltd, has resigned. Sundaram has been an investment banker in the aviation industry for at least a decade. He was instrumental in structuring aircraft sales and lease-back deals for Deccan Aviation, which ran Air Deccan, the country’s first low-fare airline, till it was acquired by and later merged with Kingfisher Airlines. Kingfisher Airlines’ vice-president, operations, D.D. Gandhi, one of the carrier’s first employees, left the company earlier in June.  Gandhi had joined Kingfisher in 2005 after a year with Deccan Aviation to head the airline’s domestic and international expansion.

To stem the tide, last week, Kingfisher hiked its fuel surcharge on tickets by 400 rupees across both long and short haul domestic routes. The company is reportedly looking to rollover around Rs 800 crore of its short term debt. It is also learnt to be finalizing the paper work for borrowing an additional Rs 1,500 crore from Indian public sector banks.  Kingfisher has also started exploring other ways to increase the traffic on its network. As of June 1, Kingfisher joined the Global Explorer, which features all members of the oneworld® alliance and some selected other airlines, which offers round-the-world fares. Members of oneworld alliance and some other non-member airlines which are part of the Global Explorer programme will now be able to offer fares for the Indian domestic network. Members of oneworld alliance serve five points in India but the addition of Kingfisher Airlines’ domestic network from today expands that to a further 62 getaways across the country. This is the first time an Indian domestic network is being offered for round-the-world fare programme.

(Source: New York Times, LiveMint.com, TravelbizMonitor)

A power struggle between Volkswagen chairman Ferdinand Piëch and Porsche’s management continued to intensify on Friday, just as the company announced that sales had crashed 15 percent.

Image Courtesy: Apture

Sales Tsunami

Friday’s numbers are creating a Tsunami of sorts at the German automaker. Bloomberg reports that Porsche SE’s sales for the period through April 30 declined to 4.64 billion euros ($6.46 billion) from 5.46 billion euros a year earlier, Stuttgart, Germany-based Porsche said today in a statement. The company reiterated that revenue and earnings will fall this fiscal year, based on “extremely poor business” in the first three months of 2009. Porsche’s nine-month vehicle deliveries fell 28 percent to 53,635 cars and SUVs, as Cayenne sales dropped 25 percent to 24,689 units. Deliveries of the 911 fell 18 percent to 20,254 cars. Sales of the less-costly Boxster model, including the Cayman version, fell 47 percent to 8,692 cars.

Changing Partners

The drop in sales will reduce Porsche’s options for paying back more than 9 billion euros of debt stemming from its purchase of a majority stake in Volkswagen AG, Europe’s biggest carmaker.   The sports car maker has entered exclusive talks with the Qatar Investment Authority, the sovereign wealth fund of the energy-rich Persian Gulf emirate. It could acquire as much as 25 percent of Porsche’s voting shares, which have long kept the Porsche family firmly in charge. The Qataris, who would get a seat on Porsche’s supervisory board, may also purchase the options Porsche has on VW shares.  Qatar could bring as much as €5 billion into the company, analysts estimate, helping to relieve the €9 billion debt load that Porsche incurred to acquire 50.76 percent of Volkswagen.

To tide it over, Porsche has applied for a loan of €1.75 billion from a fund the German government set up in March to help companies through the financial crisis. The request is being reviewed in Berlin, with a response expected in the coming days or weeks.

Dream Turned NightMare

Interestingly, the New York Times has a wonderful article explaining how Porsche’s top enchilada reacted to this reversal of fortunes.  When Wolfgang Porsche learned that his family’s sports-car maker, once bent on taking over Volkswagen, now had to beg its giant rival for money, he looked as if he were going to faint.  “He went absolutely white,” said one person briefed on that secret meeting, which involved executives from both companies. “It was as though he’d heard someone died.” A day later, on March 23, fax machines around Germany spit out a piece of paper for Volkswagen’s board members to sign: an emergency loan of €700 million, or $977 million, for Porsche from its former prey — Volkswagen.

Mr. Porsche is now on the verge of accepting Porsche’s integration into Volkswagen, rather than the hoped-for David-versus-Goliath takeover. On top of that embarrassment, Porsche also is seeking outside investors and a government bailout.

“This is becoming a reverse takeover on a financial level,” said Arndt Ellinghorst, head of automotive research at Credit Suisse in London. “Porsche has debt and VW has the luxury of cash.”

The company has responded to the sales drop by periodically suspending production. Porsche will halt work for two days between now and the end of July for a total cutback of 21 days for the fiscal year, Albrecht Bamler, a spokesman, said today.

Controlled by the Porsche and Piech families, the sports- car maker dropped its Volkswagen takeover plans on May 6, saying it will seek talks on creating an “integrated” company that would put Porsche alongside Volkswagen’s nine brands, which also include luxury unit Audi and mass-market manufacturer Skoda. Porsche said today that “there is a consensus” among family members to continue with creating an integrated group.

Arrival of Mr. McNasty & Blame Game

This change in fortunes has brewed a nastiness at the top levels of Porsche’s management that’s unseen in the history of the carmarker.  Controlled by the Porsche and Piech families, the sports- car maker dropped its Volkswagen takeover plans on May 6, saying it will seek talks on creating an “integrated” company that would put Porsche alongside Volkswagen’s nine brands, which also include luxury unit Audi and mass-market manufacturer Skoda. Porsche said today that “there is a consensus” among family members to continue with creating an integrated group.

Porsche CEO Wendelin Wiedeking and Piëch have been exchanging increasingly nasty words in recent days, the daily Süddeutsche Zeitung reported Friday. Piëch blames Wiedeking for increasing the company’s mountain of debt, now around €9 billion, in a failed attempt to take over Volkswagen.

Wiedeking, in turn, has said Piëch has harmed the company with his public criticisms at a sensitive time when the two companies are discussing a merger. Piëch is the grandson of Porsche founder Ferdinand Porsche and left a career at the company to work for Volkswagen in the 1990s.

In a letter to Piëch dated May 13, cited by the newspaper, Wiedeking warned Piëch that he would be help “personally responsible” if Porsche were harmed by Piëch’s verbal assaults. In the rarified world of German boardrooms, such strong language is almost unheard of and reflects the complex pressures brought on by rivalries between the Piëch and Porsche clans, collapsing car sales, industry consolidation and a credit crunch brought on by the financial crisis.

If this is not enough drama wait till you see what happens in the months ahead.  Looking ahead, the company declined to give a precise forecast but said sales were likely to fall below the level in its previous fiscal year.

(Source: The Local, New York Times, Bloomberg)