AAI gets nod to offer ground handling

The Airports Authority of India (AAI) has decided to enter the lucrative business of ground handling across all the airports in the country and is likely to invite Expressions of Interest for joint ventures with some private players at some of the major airports. Though the Airports Authority had decided to take the plunge into the Rs 1,000 crore ground handling (GH) industry (with the industry growing everyday), it was waiting for the introduction of the Civil aviation policy, as one of the policy recommendations stated that to streamline GH operations, three agencies comprising airport operators, an independent agency and a joint venture company should carry out ground handling at the airports. Even as the policy is expected to be in place in a few months, Civil Aviation Minister Praful Patel has also given a go-ahead to the AAI. “You should go ahead with the plans, and even more so because you are present across all the airports,” he said. Ground handling comprises aircraft handling, passenger handling, check-in services, and cargo handling services.

AAI has also shown interest in developing the city side of the 35 non-metro airports as a major part of the company’s revenue in 2005-06 came from non-aeronautical services. After Delhi and Mumbai airports’ modernization being taken up private players, the two airports that generated maximum revenues AAI looking for other pastures. In 2005-06 of the Authority’s total revenues of Rs 3,490 crore, Delhi and Mumbai contributed Rs 1,328 crore in revenue (that too not taking into account route navigation and landing charges), ie, 38% of the total revenues were generated by only the two metro airports. The AAI has also contended that since at the smaller airports there was no landing and parking charges for below 100 seater aircraft, which usually operated out f the small airports, the air-side revenues from these airports was very small. That was the reason the airports Authority wanted to take up the development and management of the city-side of the airports. The Committee on Infrastructure (CoI) had earlier set up a task force lead by Anwarul Hoda, a member of the Plan panel. The Task Force has recommended that for the non-metro airports, the city-side development be undertaken through PPPs while the airside development is carried out the Airport Authority of India, keeping open the possibility of PPPs in select airports.

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