Mumbai: State-owned airline company National Aviation Co. of India Ltd (Nacil), that holds India’s flag carrier Air India, is scouting for an international partner to start ground-handling operations in foreign airports to gain a global foothold and boost its ground-handling revenues by at least 25%, said a top company official.
“With an international partner for ground-handling services, we will have wider potential within India and international airports. An international partner will make it easy to bid for overseas projects,” said a senior Nacil executive, who did not want to be named.
The company recently invited select firms to partner it for providing ground-handling services to client airlines at airports in India and abroad. Such operations include passenger, ramp and cargo services, in addition to cabin cleaning and flight dispatch.
Revenue from ground-handling services for Nacil in the previous fiscal year was Rs800 crore and it is likely to cross Rs1,000 crore this year, with new assignments expected in Indian and overseas airports, the Nacil official said.
The airline company handles 3,600 flights a year in Mumbai and 3,200 flights in Delhi, according to data by Nacil.
Nacil has set up a business unit for ground-handling as part of the recent Air India-Indian Airlines merger. It currently provides services to its own flights at Indian airports and to other international airlines flying into Indian airports.
The company has already set up a venture with Singapore Airport Terminal Services Ltd, or Sats, for providing ground-handling services at the new Bangalore and Hyderabad international airports.
The Nacil executive said the company has asked for partnership proposals from select ground-handling companies, based on their experience and scale. “We have already dropped certain companies and shortlisted nearly a dozen firms for our joint venture arrangement. We will select one of them through bidding.”
Besides Sats, other possible partners for Nacil include Menzies Aviation Plc., Fraport AG, GlobeGround Berlin, Cambata Aviation Pvt. Ltd, Swissport International Ltd and Worldwide Flight Services.
However, other domestic airlines are not too excited about this move by the public sector undertaking.
“I think ground-handling is an integral part of airline operations, and respective airlines should be allowed to carry out their own ground-handling services. Outsourcing these services would mean paying two-three times more to a third party,” said Wolfgang Prock-Schauer, chief executive of private sector carrier Jet Airways India Ltd.
According to policy guidelines of the ministry of civil aviation, ground-handling can be carried out by the respective airport operators or their joint venture companies, or subsidiary companies of the national airline (Nacil) or its joint venture.
The guidelines also allow this to be carried out by other ground-handling service providers selected through competitive bidding on the basis of sharing revenues by the airport operator, subject to the government’s security clearance.
The policy specifies that airlines or entities currently involved in ground-handling but not covered under the policy will not be allowed to undertake self or third party handling from 1 January 2009.
“Self-ground-handling will give economies of scale and efficiency for Jet Airways. We think we will be able to handle the operations in a better and cost-efficient manner,” said Prock-Schauer.