Kingfisher Airlines snaps ground-handling deal with Indian

Kingfisher Airlines is terminating the ground handling agreement with Indian, which it struck at the time of inception two years back. The Vijay Mallya-led airline is ending the contract, which heralded a large outsourcing deal worth Rs 120 crore annually with Indian, as it is opting for self-ground handling, a company official said. The development comes at a time when Kingfisher Airline was looking at re-negotiating the contract, which was perceived to be an expensive affair for the airline, sources added. Mr Mallya had earlier hinted at the re-negotiating the deal. “The ground-handling deal with Indian estimated approximately at Rs 120 crore annually would result in significant savings besides improving efficiencies,” Rajesh Verma, executive V-P, Kingfisher Airlines, told ET.

Sources said Kingfisher could save up to 50% having opted for self ground-handling that comprises passenger handling at the city side of the airport and aircraft handling. It also includes loading and unloading of aircraft, fuelling, cleaning and push-back facilities. Currently full service carriers like Jet Airways, Sahara and Indian have self-ground handling operations. However Kingfisher Airline’s existing aircraft engineering and maintenance agreement that was part of the outsourcing deal with Indian will continue. And the private airline would also continue to share Indian’s terminal in Mumbai and Delhi. GoAir is another private carrier using the same terminals. With self-ground handling operations Kingfisher Airlines will have its own equipment like baggage coaches, tractors, belt loader and trolleys.

The airline will also have its own loaders and ramp agents. Mr Verma says, “Ground handling constitutes 6% of our total operational cost.” Kingfisher with around 10% share of the passenger market by volume operates over 153 flights daily across 27 destinations. The airline has a fleet of over 25 aircraft from the Airbus family and ATR. Kingfisher Airlines is the first Indian carrier to have placed an order for five Airbus A380s, five A350s, five A340s and five A330s. The deliveries of A330s are expected to begin in 2007, of A340s in 2008 while the A380s and A350s arrive in 2010 and 2012 respectively.

Courtesy: Economic Times

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