India Ministry of Civil Aviation outlines details of new ground handling policy

India's Minister of Civil Aviation Ajit Singh met (25-Oct-2012) representatives of Indian airlines to address their apprehensions about the new policy of the Government on ground handling of services at Indian airports which was to be implemented with effect from 31-Dec-2010. The meeting was attended by representatives of the airlines including Air India, Jet Airways, Spice Jet, Indigo and Go Air, airport operators and government officials. Details includes:

• Reason behind new policy: Mr Singh said the new policy has been framed after approval of Cabinet Committee on security (CCS) with the prime objective to minimise safety and security risks. This also aims at bringing economies of scale, ensure optimal utilisation of personnel and equipment and bring standardisation, he noted;
• Concerns on monopoly operations: Allaying fears of regarding monopoly of few ground handlers, Mr Singh clarified there can be as many ground handlers as can fulfill the conditions stipulated in this regard except airlines themselves. He noted airlines can create subsidiaries for the purpose of ground handling and these subsidiaries can participate in the process to become designated ground handler. However, he clarified that outsourcing of employees is not permitted due to security reasons. He also called upon the airlines to motivate low cost ground handlers to enter the Indian market;
• Royalties: Mr Singh informed that the Ministry and Airports Authority of India (AAI) are looking into rationalisation of royalty to be paid by ground handlers to airport operators including AAI so that the cost of ground handling remains reasonable;
• Cochin Airport: Indian carriers also brought to the notice of the Minister the "monopolistic attitude" of Cochin Airport wherein airport does not allow airlines to do their self-ground handling though the airport is a non-metro airport and as per ground handling policy the airlines are allowed to do self-ground handling. Mr Singh assured it would be ensured that all airports compulsorily stick to ground handling policy of the Government;
• Committee establishment: It was decided during the meeting that a committee headed by the Joint Secretary in the Ministry of Civil Aviation Shri Alok Sinha will be constituted which will draw detailed guidelines on ground handling after consultation with airlines;
• Entities eligible to undertake ground handling services at airports:
  • All Metro Airports located at Delhi, Mumbai, Chennai, Kolkata, Bangalore and Hyderabad:
    • The airport operator itself or its JV partner;
    • Subsidiary companies of the National Carrier or its JV specialised in ground handling services;
    • Any other ground handling service providers selected through competitive bidding on revenue sharing by the airport operator;
    • A minimum of two ground handling service providers would be authorised at these airports in addition to the subsidiaries of national carrier.
  • At all other airports: in addition to the entities mentioned above, the airline operators except the foreign airlines were permitted to undertake self-handling. The airlines complained against the new policy arguing that it will lead to retrenchment of large number of personnel, there will be no alternate use of assets already in place etc. After taking into consideration views of all stake holders, a CCS note was submitted and the competent authority approved that:
    • All private airlines, including foreign airlines, may undertake self handling in respect of "passenger and baggage handling activities at the airport terminals" and "traffic service including the passenger check-in", which require passenger interface, at all airports;
    • All cargo airlines, which have their own cargo aircraft, may undertake self handling in their hub airports;
    • The time limit for exit of non-entitled entities be extended beyond 31-Dec-2012 up to 31-Dec-2010;
    • Foreign airlines and private independent ground handling service providers not be permitted self ground handling/ground handling at joint user defence airfields. [more - original PR]