The Start of Something Big?

Ground handling in India is in a state of flux and it’s not just down to the drop in demand. The sector is facing a number of domestic challenges and will have to make some hard decisions in the next 12 months.

Currently, airlines either self-handle, use the major public sector operator — National Aviation Company Ltd. (NACIL), which runs state carrier, Air India — or contract to a private provider such as Menzies Bobba or Cambata Aviation.

However, the Directorate General of Civil Aviation (DGCA), citing security reasons, has proposed a new ground handling policy. Under the terms of the proposal, activities would be limited to the respective airport operators (or their joint venture companies), or subsidiary companies of NACIL (or its joint ventures).

So other ground-handling service providers would only be allowed to operate on the basis of sharing revenues and would be subject to the government’s security clearance.

The policy was due to come into effect on Jan. 1, 2009, but according to a spokesperson for the DGCA, its implementation “has been deferred by six months or until further order.”

The reason for the postponement is a storm of protests from airlines and existing ground handling staff.

“I think ground handling is an integral part of airline operations and respective airlines should be allowed to carry out their own ground handling services,” says Wolfgang Prock-Schauer, chief executive of Jet Airways, one of India’s successful low cost carriers.

“Outsourcing these services would mean paying two or three times more to a third party,” he adds. “Self-handling will bring economies of scale and efficiency. We think we will be able to handle operations in a better and cost-efficient manner.”

Working for the government
Unions have also snubbed the idea, believing there would be significant job losses and a change in employment status. Specifically opposing a decision for a joint venture with Singapore Airport Terminal Services (SATS), union workers at NACIL were preparing for “flash strikes” if the policy went ahead.

According to George Abraham, general secretary, Aviation Industry Employees’ Guild (AIEG), the DGCA plan would definitely have meant job cuts while those that remained might no longer have been government employees — a notable point in a bureaucratic country.

It was also reported that a senior official at the Airports Authority of India (AAI) estimated that more than 50,000 people employed with foreign airlines at Delhi, Mumbai, Kolkata, Chennai, Banaglore and Hyderabad airports would be at risk of losing their jobs.

Aviation Minister Praful Patel apparently contacted airport operators across the country to suggest they use the services of existing ground handling employees, but ultimately the pressure has proved too great and the idea has been put on the back burner.

The next step in the saga — if there is to be one — isn’t yet clear. Meanwhile, the industry is also awaiting the first major decisions from the Airport Economic Regulatory Authority (AERA), a newly formed body which promises to influence tariffs going forward.

There is no respite, however. Other areas of concern will give Indian ground handling companies plenty to think about.

IATA’s Safety Audit
Safety and quality are never far from the minds of any aviation company but are particularly relevant to the Indian market, given its potential to become one of the busiest in the world.

Damage on the ground costs world civil aviation around $4 billion a year, a huge expense at a time when every penny counts. IATA’s Safety Audit for Ground Operations (ISAGO) will address this critical issue and provide exacting standards for all companies to follow.

“None of the ground handling services providers at Indian airports have undergone the IATA audit process as yet, so it is not possible to exactly point out any problems on the quality of the services provided,” says Amitabh Khosla, IATA’s country director for India. “However, quality management, service standards, risk and safety management systems, equipment deployment and the training of personnel — fine-tuning their experience and capabilities — must be addressed to meet international standards on safety and risk management.”

Khosla reveals that while audits have yet to be confirmed by any Indian companies, ISAGO is “welcomed by the carriers and the ground handlers.”

He suggests the audit will provide the following benefits:

  • safer ground operations, less accidents and injuries
  • elimination of redundant audits from airlines
  • reduced costs
  • improved safety oversight
  • improved quality standards
  • a better understanding of risk exposures, essential for prevention
  • enhanced company image and reputation

IATA is already on the Indian ground handling scene. Its Airport & Inflight Services team has been holding workshops for ground handling agencies on specific areas like service level agreements and standards.

New standards
Markers are in any case being set. New Greenfield airports and new joint ventures have been able to input fresh ideas away from the congestion experienced at older gateways such as Mumbai.

Menzies Bobba — formed from Menzies Aviation and local company, the Bobba Group — offers services at Hyderabad’s new Rajiv Ghandi International Airport. Airlines handled include Blue Dart, Lufthansa, British Airways, Oman Air, Saudi Airlines, Qatar Airways, Gulf Air and Air Arabia.

Spokesperson Sudha Prasad says the newly designed airport — which opened in March 2008 — has really helped with the level of ground handling services provided by the company. For example, check-in counters provide great flexibility while passengers are not inconvenienced by having to put bags through X-ray machines before check-in thanks to an infrastructure that includes inline screening.

“Customer feedback has been good,” says Prasad. “They are delighted with the facilities offered for smooth processing. Duty-free shopping, food outlets, strategically located flight information displays, Premium Plaza lounges and VIP lounges are all greatly appreciated by customers.”

Airlines are also benefiting from what represents an innovative approach to Indian aviation handling. The baggage delivery process can be expedited using free “swing” belts which cover both domestic and international traffic, while on the ramp a Visual Docking Guidance System (VDGS) ensures precision parking of the aircraft.

Other minor enhancements such as Fixed Electrical Ground Power (FEGP) — which is both environmentally friendly and a space saver — add up to a package that is in the vanguard of Indian ground support services.

Hopes and fears
Hopes are that other airports will also raise the bar, developing an infrastructure that allows ground support to realize efficiencies across the board. Recently a team from Beijing Capital International Airport (BCIA) visited the new Terminal 3 at Indira Ghandi International Airport in Delhi. The BCIA team was responsible for developments at Beijing prior to the Olympics, and they expressed every confidence that the construction of the enormous 34-million capacity terminal would be ready before the city hosts the Commonwealth games in 2010.

Indian ground handling is currently an exciting blend of business models operating a variety of infrastructure for an array of airline types. Bringing order to the sector will not be easy.

The regulators have some tough decisions ahead but so do the ground handling companies themselves. They will need to position their companies to meet exacting international standards even though the future environment — in terms of new facilities, falling demand and changing regulations — is a cloudy one. The next 12 months could be crucial.