ECONOMICS OF SAFETY BY DECCAN AVIATION LIMITED

INTRODUCTION ECONOMIC BOOM IN INDIA HAS ENHANCED DEMAND FOR HELICOPTER SERVICES FOR NUMBER OF APPLICATIONS ECONOMIC BOOM IN INDIA HAS ENHANCED DEMAND FOR HELICOPTER SERVICES FOR NUMBER OF APPLICATIONS AVERAGE GROWTH IN DEMAND ESTIMATED AT 15% ANNUALLY AVERAGE GROWTH IN DEMAND ESTIMATED AT 15% ANNUALLY TO ENSURE SURVIVAL - YIELD TO INPUT RATIO SHOULD BE POSITIVE TO ENSURE SURVIVAL - YIELD TO INPUT RATIO SHOULD BE POSITIVE THIS RATIO HAS A LARGE BEARING ON INVESTMENT IN SAFETY THIS RATIO HAS A LARGE BEARING ON INVESTMENT IN SAFETY SAFETY BEGETS ALL ELSE SAFETY BEGETS ALL ELSE

NUMBERS MATCHING FOR ECONOMIC VIABILITY MARKET REALITIES EXISTING IN INDIA TODAY ARE MARKET REALITIES EXISTING IN INDIA TODAY ARE  LOW SELLING RATES PER HOUR  SELLING RATES DECREASING WITH TIME DESPITE INFLATIONARY PRESSURES  HIGH COSTS OF TRAINING AND RETAINING PILOTS AND ENGINEERS  SQUEEZE ON AVAILABILITY OF TRAINED MANPOWER ONLY LIKELY TO DETERIORATE  HIGH FUEL PRICES AND OTHER COSTS MATCHING OF YIELD & OPERATING COSTSMATCHING OF YIELD & OPERATING COSTS  MARGINS IF ANY HAVE DECREASED TO UNSUSTAINABLE LEVELS

TREND OF CONTRACTED RATES PER HOUR

DEPLETION OF CONTRACTED RATES PER HOUR - BELL 212

MARGINS SQUEEZE ANALYSIS MARGINS SQUEEZE ANALYSIS MARGINS SQUEEZE ANALYSIS  ECONOMIC VIABILITY QUESTIONABLE  AGRICULTURAL AVIATION NO LONGER EXISTS  REVERSE FINACING STUDY BEING UNDERTAKEN FOR ACQUISITIONS  CONSEQUENTLY ACQUISITION PACKAGE OF AIRCRAFT BEING RESTRICTED TO BARE ESSENTIALS  INITIAL TRAINING TOO BEING LIMITED TO ESSENTIAL MINIMUM  ADVANCED RECURRENT TRAINING WITH OEM ALMOST NON-EXISTENT

MARGINS SQUEEZE ANALYSIS  MAINTENANCE OF LARGER POOL OF TRAINED PERSONNEL NECESSARY TO CATER FOR POACHING/ATTRITION. PRESENT SCENARIO DOES NOT AFFORD THIS LUXURY

OTHER FALLOUTS OF MARGINS SQUEEZE NO INVESTMENTS BEING MADE IN NEWER AIRCRAFT NO INVESTMENTS BEING MADE IN NEWER AIRCRAFT NO INTEGRATION OF MODERN SYSTEMS, ESSENTIAL TO ENHANCE SAFETY, BEING MADE NO INTEGRATION OF MODERN SYSTEMS, ESSENTIAL TO ENHANCE SAFETY, BEING MADE AVERAGE AGE OF INDIAN OFFSHORE FLEET IS APPROXIMATELY 15 YEARS AVERAGE AGE OF INDIAN OFFSHORE FLEET IS APPROXIMATELY 15 YEARS NO INVESTMENTS BEING MADE ON THE GROUND TO ENHANCE SAFETY NO INVESTMENTS BEING MADE ON THE GROUND TO ENHANCE SAFETY

OTHER FALLOUTS OF MARGINS SQUEEZE FACTORS CONSIDERED SURMOUNTABLE TO ENSURE SAFETY NOT BEING ADDRESSED ADEQUATELY FACTORS CONSIDERED SURMOUNTABLE TO ENSURE SAFETY NOT BEING ADDRESSED ADEQUATELY EFFICIENCY BEING ADVERSELY AFFECTED BY PRESENT SCENARIO EFFICIENCY BEING ADVERSELY AFFECTED BY PRESENT SCENARIO IN OVERALL ANALYSIS OIL COMPANIES PAYING MORE WITH SAFETY ISSUES BEING ADDRESSED IN A REACTIVE MANNER IN OVERALL ANALYSIS OIL COMPANIES PAYING MORE WITH SAFETY ISSUES BEING ADDRESSED IN A REACTIVE MANNER INDUSTRY UNABLE TO SUSTAIN ITSELF UNLESS FUNDS FROM EXTERNAL SOURCES ARE INFUSED INDUSTRY UNABLE TO SUSTAIN ITSELF UNLESS FUNDS FROM EXTERNAL SOURCES ARE INFUSED ALL THIS HURTS EVERY COMPONENT OF OPERATIONS ALL THIS HURTS EVERY COMPONENT OF OPERATIONS

FUTURE NEEDS OF INDUSTRY ESSENTIAL NEED TO REPLACE AT LEAST 50 OFFSHORE AIRCRAFT IN NEXT 5 YEARS ESSENTIAL NEED TO REPLACE AT LEAST 50 OFFSHORE AIRCRAFT IN NEXT 5 YEARS WITH GROWTH IN DEMAND FOR OFFSHORE TASKS 50 MORE AIRCRAFT NEED TO BE PROCURED WITH GROWTH IN DEMAND FOR OFFSHORE TASKS 50 MORE AIRCRAFT NEED TO BE PROCURED MARGINS NEED TO BE GENERATED FOR THIS REPLACEMENT MARGINS NEED TO BE GENERATED FOR THIS REPLACEMENT WITH EXISTING TRENDS FINANCING FROM SELF GENERATED FUNDS IS ANYTHING BUT POSSIBLE WITH EXISTING TRENDS FINANCING FROM SELF GENERATED FUNDS IS ANYTHING BUT POSSIBLE

AFFECTS ON CLIENTS UNECONOMICAL OPERATIONS UNECONOMICAL OPERATIONS SAFETY FACTORS AS MANDATED BY AUTHORITIES ARE BEING MET BUT LESS THAN COGENT APPROACH BEING ADOPTED SAFETY FACTORS AS MANDATED BY AUTHORITIES ARE BEING MET BUT LESS THAN COGENT APPROACH BEING ADOPTED LATEST WORLD STANDARDS OF SAFETY MAY NOT BE FOLLOWED AS NO INVESTMENTS IN NEW SAFETY ENHANCING HARDWARE LIKELY TO BE CONSIDERED LATEST WORLD STANDARDS OF SAFETY MAY NOT BE FOLLOWED AS NO INVESTMENTS IN NEW SAFETY ENHANCING HARDWARE LIKELY TO BE CONSIDERED A COMPREHENSIVE APPROACH TO SAFETY BY ALL CONCERNED (INCLUDING REGULATORY AUTHORITIES) WOULD BE LESS PROBABLE IF FUNDS NOT MADE AVAILABLE A COMPREHENSIVE APPROACH TO SAFETY BY ALL CONCERNED (INCLUDING REGULATORY AUTHORITIES) WOULD BE LESS PROBABLE IF FUNDS NOT MADE AVAILABLE CLIENTS SHOULD CONSIDER THE MAXIM THAT “LOWEST BID NOT INDICATIVE OF BEST DEAL ON OFFER” CLIENTS SHOULD CONSIDER THE MAXIM THAT “LOWEST BID NOT INDICATIVE OF BEST DEAL ON OFFER”

REALITY AS IT EXISTS OIL INDUSTRY FINANCES ARE HEALTHIEST EVER OIL INDUSTRY FINANCES ARE HEALTHIEST EVER TREND LIKELY TO CONTINUE FOR SOME TIME TREND LIKELY TO CONTINUE FOR SOME TIME MOST OPPORTUNE MOMENT IN OIL INDUSTRY’S HISTORY TO INVEST IN HELICOPTER SAFETY MOST OPPORTUNE MOMENT IN OIL INDUSTRY’S HISTORY TO INVEST IN HELICOPTER SAFETY HUMAN FACTOR STILL HIGHEST CAUSE OF ACCIDENTS. TRAINING OF PERSONNEL CRITICAL TO MINIMIZING ACCIDENTS HUMAN FACTOR STILL HIGHEST CAUSE OF ACCIDENTS. TRAINING OF PERSONNEL CRITICAL TO MINIMIZING ACCIDENTS

“INVESTMENT IN GOOD TRAINING MAY NOT ELIMINATE ACCIDENTS ENTIRELY BUT SHORTCOMINGS WORRIES US ALL”

WAY AHEAD FOR INDUSTRY NEED FOR RATIONALIZATION OF YIELD & AVOIDANCE OF UNDERCUTTING NEED FOR RATIONALIZATION OF YIELD & AVOIDANCE OF UNDERCUTTING NEED FOR SENSITIZING OIL COMPANIES ON PERILS OF UNREALISTIC LEVELS OF UNDERBIDDING NEED FOR SENSITIZING OIL COMPANIES ON PERILS OF UNREALISTIC LEVELS OF UNDERBIDDING NEED FOR A HOLISTIC APPROACH TO SAFETY BY HARNESSING TECHNOLOGY TO OBVIATE HUMAN FACTOR RELATED ACCIDENTS & ITS NEVER BEEN MORE RELEVANT IN OUR SCENARIO NEED FOR A HOLISTIC APPROACH TO SAFETY BY HARNESSING TECHNOLOGY TO OBVIATE HUMAN FACTOR RELATED ACCIDENTS & ITS NEVER BEEN MORE RELEVANT IN OUR SCENARIO

DECCAN AVIATION LIMITED