New ground handling policy yet to take off

Written by Shaheen Mansuri | Mumbai | Updated: Feb 25 2010, 04:14am hrs
After being deferred thrice last year, the new ground handling policy, which was due in January 2010, will now take at least six months to come into effect, say sources in the civil aviation ministry. Till then, private carriers can carry on with their individual ground handling at major airports. The ground handling market is pegged at Rs 2,000 crore annually. Under the new policy, only flag carrier Air India, the airport operator and a third private operator will be allowed to provide ground handling services.

Ground handling includes general administration, baggage, freight and mail handling, loading and unloading of aircraft and transport of crew, passengers and baggage, fuel and oil handling and catering services.

An official from the ministry says, Since inter-ministerial consultations are on regarding the new ground handling policy, the decision will be taken only after June. The new policy has already been approved by the Parliament in 2007 but has been deferred time and again due to opposition from airline operators who currently manage their own services. Airlines feel outsourcing the services will render thousands working with them unemployed and would also increase their cost by atleast 30%.

At a time when cost saving is considered a saving grace for airlines, outsourcing ground handling is unacceptable. Even airport operators like the Airports Authority of India see ground handling as an additional revenue source. The combined annual revenue from ground handling services at the six metro airports like Mumbai, Delhi, Bangalore, Kolkata and Hyderabad etc is estimated at Rs 500-600 crore.

Airlines like Jet Airways, Kingfisher Airlines, SpiceJet and Paramount have an argument that they will have to shell out more if they outsource services. Says an official from Paramount Airways, All airlines stand united against the new policy. As members of Federation of Indian Airlines (FIA), we support the cause of handling ground services by operators themselves. Airlines want to be given an option of either self-handling or to outsourcing the service as per their discretion.

Currently, public sector airline Air India is one of the leading ground-handling companies in the country by carrying out its ground operations at various airports through a subsidiary, Air Transport Services Ltd, and earns over Rs 1,000 crore a year.

However, international carriers do their own ground handling. There are multiple agencies, with Mumbai airport with about 50 ground-handlers like Cambata Aviation amongst other players which handles ground handling for international carriers. For international carriers, ground-handling charges for a single landing can vary from $2,500 for an Airbus 320 family aircraft to $6,000 for a Boeing 747.