BIAL denies it barred IndiGo ground handling

Govt may not implement new ground-handling policy
BS Reporter / New Delhi June 05, 2008

The recent dispute between the Bengaluru International Airport Limited (BIAL) and Indian carriers may make the government go back on its decision to implement the new ground-handling policy next year.

According to sources in the civil aviation ministry, Bengaluru International Airport Limited (BIAL) has said that no domestic airline with a market share of below 25 per cent will be allowed to do its own ground-handling at the airport. This means that none of the Indian carriers will qualify for ground-handling. Because, even Jet Airways, the largest airline in terms of passenger numbers, commands a market share of only 21 per cent as per April 2008 figures.

BIAL has reportedly taken this stand despite the fact that the government had recently decided to allow domestic carriers to do their own ground-handling till the end of this year.

The BIAL issue was brought up today by Delhi-based low-cost carrier IndiGo, one of the airlines to be prevented by the airport authorities from ground-handling last week. According to civil aviation ministry sources, Director General of Civil Aviation (DGCA) Kanu Gohain shot off a letter to BIAL yesterday, insisting the airport has to adhere to the government policy of allowing airlines to do ground-handling. In today’s meeting with airport executives, including BIAL representatives, Chawla made it clear all airlines would have to be allowed to carry on with their own ground-handling till the end of this year.

When asked, a BIAL executive said, “BIAL has always maintained that having at least two professional ground-handlers not only makes for a competitive environment in terms of service quality and price, but also has a direct impact on the airside safety and security. However, post the meeting with the ministry today, BIAL supports the decision taken.”

Industry sources said that with airlines reacting strongly to the new ground-handling policy, the government might take a second look at implementing it from next year.

“The ministry will look at whether self-handling is more economical for airlines than getting the same job done by external agencies. If yes, it might work towards letting the old policy of allowing airlines to do their own ground-handling continue,” said a ministry official.

Under the new ground-handling policy to be implemented across all airports in the country from January 1, 2009, the airport operator or a joint venture company, subsidiaries of Air India or Indian Airlines, or their joint ventures, or any other ground-handling service provider selected through competitive bidding on a revenue-sharing basis will only be allowed to offer the services.

Airlines have been opposing the policy saying that outsourcing the work to an external agent will considerably increase their expenditure, pushing them further into the red.

As an interim measure to settle the problems of airport charges before the Airport Economic Regulatory Authority (AERA) is set up, the civil aviation ministry today announced the constitution of a 10-member committee comprising members of the Airports Authority of India (AAI), private airports and airlines. This was announced at a meeting held between the ministry, airline and airport executives to look into issues like price hike in aviation turbine fuel (ATF) and high airport charges among others.

“The body will look at what can be done to ease the problems faced by the airlines due to high airport charges,” said a ministry official.

About Devesh Agarwal

A electronics and automotive product management, marketing and branding expert, he was awarded a silver medal at the Lockheed Martin innovation competition 2010. He is ranked 6th on Mashable's list of aviation pros on Twitter and in addition to Bangalore Aviation, he has contributed to leading publications like Aviation Week, Conde Nast Traveller India, The Economic Times, and The Mint (a Wall Street Journal content partner). He remains a frequent flier and shares the good, the bad, and the ugly about the Indian aviation industry without fear or favour.

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