India: The Ground Support Revolution

New Private airports under construction

Cochin International Airport Limited (CIAL) was India's first privately managed airport in successful operation since 1999. The Airport had granted an exclusive 10-year ground handling license to Air India.

The Air India monopoly on ground handling at Cochin ends in May 2009. Given that their initial 10-year exclusive concession expires at that time, new licenses to probably one or two companies at Cochin will be awarded and the airport operators may operate as a ground handler according to indications currently available.

In the case of the new Bangalore International Airport—a Siemens/Unique Zurich/Larsen & Toubro and local Bangalore Government joint venture—the licenses for seven years, effective in 2008, have been awarded to two consortia: Air India - SATS and Globe Ground India. This represents SATS Singapore's initial entry into India's ground handling market.

As for the new GMR Hyderabad International Airport Limited—a GMR Group/Malaysian Airports Holding and local government joint venture—the bidding process is currently on and the following companies have reportedly been invited to bid.

i) ASIG (Aircraft Service International Group)
ii) KLM Airlines
iii) Lufthansa (Globe Ground India)
iv) Air India
v) Indian Airlines
vi) Swissport
vii) Menzies
viii) WFS (Worldwide Flight Services)
ix) SATS (Singapore Airport Terminal Services)
x) Penauille Servisair
xi) Celebi Turkey
xii) DNATA, Dubai

Out of the above, the objective of the airport is to select two concessionaries—a ground handling company which is also an airline and an independent stand alone ground handling company. Air India/Indian and SATS as a consortium are likely to get one out of the above two licenses on offer.

However, it is recently understood that the Indian government's Ministry of Civil Aviation is also considering DNATA as a possible joint venture partner to Air India as an alternative to SATS, (as reported in Business Standard December 25, 2006).

To meet the above challenges of the Greenfield airport concessions and the impending liberalization of the ground handling sector by awarding new licenses through the Airports Authority of India, the following new alliances seem to be emerging:

• Swissport has formed a 51/49 joint venture with the Punj Lloyd Group, New Delhi. Punj Lloyd Group of India is a large construction company with a pending order book of almost US $3 billion.
• Globe Ground India, New Delhi is a joint venture between Lufthansa Airlines and The Bird Group.
• Cambata Aviation, Mumbai is also looking for an international partner NOT from the view of ownership, but from someone who can lend their name and expertise. This could probably be a local company in some other country like Equity Aviation South Africa.
• Jet Airport Services Private Limited, Mumbai (same ownership as India's leading, privately-owned domestic airlines Jet Airways) have reportedly entered into an MOU with ASIG. Mr. Mark Edwards, managing director of ASIG, UK reportedly stated that they wish to service a wider ground handling and into-plane services market for India and neighboring countries in partnership with the Jet Group.
• Aviation India, New Delhi has reportedly signed an MOU with Groundforce Portugal to start handling activities at various airports in India once the liberalization process is in force.
• Global Aviation, Mumbai—who earlier had an MOU with Apron Services South Africa—have reportedly tied up with Worldwide Flight Services for a joint venture.
• Global Aviation has already begun work under sub-contract from Air India at Trivandrum and Kolkatta airports and has built up their team to 300 people. Global have reportedly bought another licensed manpower company at airports by the name of Divya Aviation, with a staff strength of 4500 people.
• Livewel Aviation, Mumbai a large airport services manpower provider has reportedly tied up with Aviapartner to participate in some of the new tendering activities of Hyderabad.
• Menzies Aviation, UK have a joint venture in place with Bobba Group headquartered in Bangalore. With this alliance in place—in addition to the synergies in the cargo sector—has also resulted in a ground handling partnership for Hyderabad and possibly more airports. The Bobba Group is a Lufthansa Cargo GSA for India.
• Celebi, Turkey have tied up with the Spencers Group, part of a large Industrial House RPG Enterprises, to enter the ground handling business, virtually leaving out only Penauille Servisair—who has reportedly tied up with Associated Containers.
• Various other Indian players like Jeena & Company, Mumbai—a freight forwarder in business for over 100 years—are exploring entering this field. Likewise airlines like Kingfisher—who will move into widebodied operations—will also have an expanded set-up on their own for ground handling services under the self handling route.
• The Interglobe Group who have also promoted Indigo Airlines are also focusing on ground support as an independent activity and continue to use their background with their GSA relationships and continue their self handling business in joint venture with International airlines like Air France and Delta, in Mumbai and Chennai.