Opening up several airports to private ground handlers via competitive bidding will mark the next growth story for the civil aviation market.
THERE IS SOME GOOD NEWS for private ground handling operators. The government-run Airports Authority of India (AAI) is in the process of appointing ground handling operators, through a competitive bidding, across several of its airports. AAI, as is known, controls nearly 125 airports in the country. Private operators including Turkish firm Celebi Aviation Holding and veteran Bird Group are cautiously optimistic. Why? There are multiple reasons. First, only a third of the overall ground handling business (domestic and international) is available to private operators. That is because domestic airlines like Jet Airways, IndiGo do their own ground handling. So does Air India via its subsidiary. As a result, virtually 90 per cent of the total domestic ground handling business in India rests with Jet, IndiGo and Air India leaving companies like Celebi and Bird to rely on international carriers outsourcing their ground handling business. Of course, recently domestic operators like the Air Asia and Vistara have begun outsourcing their ground handling, but between the two, the fleet-size of aircrafts is significantly low.
There are other reasons too. In 2017, the government came out with the new regulations for ground handling called the ‘Ground Handling Services Regulations 2017’. According to the new regulation, airports handling 10 million or more passengers annually are required to have three ground handling agencies. This includes a ground handler belonging to airport operator/its joint venture or JV/its wholly-owned subsidiary or a JV or a subsidiary of Air India or any other agency. Also, all appointments of ground handlers need to be confirmed through a bidding process. Airports with less than 10 million passengers (annually) can hire “up to” three agencies.
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