First scheduled to come into effect on 1 January 2009, then postponed to 1 July 2009 a new ground handling policy, necessitated by the rapidly developing aviation market in India, was postponed again to January 2010. But this time around the date was pushed backeven further, to a year later.

Initially approved by Parliament on 1 February 2007, the civil aviation ministry wanted to put an end to ground handling being done by private airlines like Jet Airways and Kingfisher Airlines. Desirous of keeping the ground handling more closely under its control, apparently for security reasons, the policy limited ground handling activities that involved passenger check-ins, baggage and cargo handling at the terminal and cleaning and refuelling of aircraft, to only three players at the country’s six major airports.

It then decided that the groundhandlers that would operate at Delhi, Mumbai, Bangalore, Hyderabad, Kolkata and Chennai airports would be Air India- Singapore Airport Terminal Services, the airport operator — GMR, the private operator in Delhi, GVK in Mumbai, BIAL in Bangalore and HIAL in Hyderabad and the Airports Authority of India (AAI) in Kolkata and Chennai — and the third to be selected by competitive bidding.

Rampant opposition
The move had been opposed by private airlines through the Federation of Indian Airlines (FIA) on behalf of Jet Airways, Kingfisher Airlines, SpiceJet Ltd, Go Airlines (India) Pvt. Ltd (GoAir), Paramount Airways Ltd and InterGlobe Aviation Ltd (IndiGo). FIA has pointed out that a number of its member-airlines had invested in equipment and personnel at different airports and disbanding the department would not only result in a financial loss, but also put an end to around 10,000 jobs.

In addition, the private airlines also said that handing over ground handling to “third parties” — at least the part that involved direct contact with passengers during check-ins — would hamper service standards and therefore was not acceptable. The other more important reason for the opposition by private airlines came from the fact that expenses would rise substantially. Apparently, private airlines that have been facing whopping losses have been hesitant to implement the policy since they would have to spend three times more for the services.

A lucrative business
Indeed, ground handling is a lucrative business: Ground-handling companies have been eyeing the Rs 20 billion (US$432 million) crore per year business. On its part, Air India, the leading groundhandling company in the country, earns around Rs 10 billion a year through its ground handling subsidiary, Air Transport Services Ltd. Among those looking for an opportunity to come into the ground-handling business in India are Singapore Airport Terminal Services Ltd, GlobeGround Deutschland GmbH, Services Portuguese de Handling, SA, Cambata Aviation Pvt. Ltd, Dnata Group, Menzies Aviation Plc, Jet Air Pvt. Ltd, Jeena and Co. Pvt. Ltd, Taneja Aerospace and Aviation Ltd and the Bird Group of Delhi.

The FIA’s main grudge was that Air India was being allowed to continue ground handling while the others were being prevented. The private carriers also noted that most airlines at international airports were given the option of doing the ground handling themselves or outsource it to whichever handler it thought fit. This lead to competition and ultimately lowering of the costs.

On their part most of the present ground handlers said that they were not in competition with the airlines but were with them to provide better services. They had secured the contracts for ground handling after bidding successfully through tenders floated by the airports. These ground handlers say they offer specialised services with their advanced equipment and trained personnel.

Now that the policy has been pushed back by another year, private airlines have been given time to find out ways to redeploy the ground-handling personnel and equipment. In the revised scedule for implementation of the policy, private airlines would be responsible for handling the passenger services while cargo handling will be done by the three agencies mentioned in the new ground-handling policy: Airport operators, Air India or its subsidiaries and other service providers selected through open bidding.

Express opposition
However it is the cargo carriers — especially the express service providers — who are most upset. According to the new guidelines, express carriers like Blue Dart, DHL, FedEx could self-ground handle at their hubs but at elsewhere they would have to give it up to the three agencies.

Earlier too, Blue Dart had raised objections to giving up ground handling to other agencies. It had sent a strong representation to the aviation ministry before the ground handling policy was to be implemented on 1 January 2009 pointing out that the policy had ignored the needs of express cargo services which required special handling and that the express services would only be increasing costs and decrease efficiency of the operations. The policy clearly states that the agents who would handle passenger baggage and cargo meant for the bellyhold of passenger aircraft would also be handling express cargo. This was clearly not acceptable to the express sector. Their contention: Express cargo was a specialised form of cargo involving time-bound deliveries and money-back guarantees.

It also involved a system through which the customer could track the whereabouts of a consignment. A number of cargo and express executives highlighted to Payload Asia that express cargo had been delayed in a number of places where the same set of cargo handlers were responsible for bellyhold cargo, as well as express cargo.

Blue Dart’s managing director, Tulsi Mirchandaney, had earlier told this correspondent that the ground handling policy would have a significant impact on the quality of air express airline operations and wreak havoc with the business. She had recommended a review of the policy to exclude air express airline operations because of the special needs of the segment that are completely different from those of the passenger segment and because of the significant role air express cargo plays in trade facilitation.

Status quo
As of now, status quo has been maintained. But questions continue to pop up. One wonders why the policy is skewed to apparently benefit Air India? To top it all, Air India’s Arvind Jadhav announced at the beginning of January this year that Air India’s ground handling would be hived off to a separate business unit, enabling it to earn substantial amounts by serving other airlines. Perhaps even Air India sees the proverbial writing on the wall.

But then the government is justified too. With the present security scenario and ground handling becoming specialised, it would be worthwhile to have fewer agencies taking care of it. There would be fewer and better-documented personnel with access to the tarmac, hangars and related facilities. The result: Standardisation of equipment and security and safety measures, something that benefits every player.