Feb. 5 -- NEW DELHI -- The government's new ground handling policy has left the airline industry divided. While established full-service carriers Jet Airways and Air Sahara, are keen to manage ground handling on their own, low-cost carriers are in favour of outsourcing and want adequate competition among service providers to keep their costs down. Jet has close to 5,000 employees involved in various ground handling activities while Air Sahara has around 2,000 people on their rolls.
The government's new policy comes into effect from January 1, 2009, at six major airports -- Delhi, Mumbai, Kolkata, Chennai, Bangalore and Hyderabad. As per the new policy, there will be three ground handlers at each airport -- the airport operator or its subsidiary, a subsidiary of Air India and Indian and a ground handler selected through competitive bidding process.
Both Jet Airways and Air Sahara on Friday requested the Ministry of Civil Aviation to allow them to handle their own ground operations. If the government sticks to its guns, then Jet and Sahara will have to spin off their ground handling operations into a separate company and bid for the third slot. If unsuccessful, they may have to lay off people.
Jet Airways said in a statement that ground handling, both in the terminal and at the ramp is an integral part of its services. "The airline should be allowed to continue to handle it's own flights with its own organisation," Jet Airways CEO Wolfgang Prock-Schauer said.
On a similar note, Air Sahara president Alok Sharma said both the established carriers possessed adequate infrastructure and trained manpower to carry out these services in most major airports. Mr Sharma said that Air Sahara's ground handling related costs were one of the lowest in the industry.
Most new airlines such as Air Deccan, Kingfisher and SpiceJet have already outsourced a large part of their ground handling activities and feel that the new policy will help to further grow the Rs 1,000-crore ground handling business in the country with proactive private sector participation.
Another discordant note among industry players is that though the two established carriers want the Federation of Indian Airlines, the industry body, to take up this issue with the Government, many low-cost players feel that only those issues that are of common interest to all the members should be taken up by the association.
Reacting to the reservations expressed by some of the players, a senior official of Ministry of Civil Aviation noted that these private carriers should hive off their ground handling departments into separate companies and bid for the business. However, Mr Sharma of Air Sahara is not very enthused with the idea.
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