The Start of Something Big?

Turbulent times in the Indian ground handling industry mean the coming year could define the levels of service far into the future.

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.”

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