It’s a turbulent time in the Indian aviation sector with rising fuel prices, ambitious new entrants, rapid airport modernisation only some of the challenges facing the industry. The latest controversy centres around ground handling with a tug-of-war between foreign and domestic ground handlers and airline, many of whom want to do their own handling.
While the airlines insist on being service providers at airports, airport developers and the ministry of civil aviation hold a different view. The recent tiff between Bengaluru International Airport (BIA) and other airlines over the ground handling norms has also added fuel to the fire and left the ground handlers in a lurch.
According to industry sources, as of now, there are around 25 ground handlers – both national and international companies – which have expressed interest in handling ground services in more than 40 airports, which fall under the recent airport modernisation process, according to the Economic Times.
An Ernst & Young report estimates the total ground handling market in India at Rs 30 billion (US$700 million). The ground handling companies believe that with more airports becoming functional, there will be enough space for all players to compete and thrive. Earlier this year, the government relaxed foreign direct investment (FDI) norms for scheduled and non-scheduled air services, cargo and ground handling with a maximum 74 per cent FDI allowed, subject to regulations and security clearance.
Already, multinational handlers such as Dnata (ground handling arm of Emirates Group), SATS, Menzies, GlobeGround, Equity Aviation, Swissport and National Aviation Services (NAS), Kuwait, are entering the Indian ground handling segment alone or by forming joint ventures with Indian companies such as Bobba group and Punj Lloyd.