Pvt airlines may get into ground handling

The government is likely to allow domestic private airlines to undertake ground handling services of other carriers. This will open new revenue streams for the airlines.

At present, only the two national carriers offer third party ground handling services, while private carriers are allowed to undertake ground handling of only their own fleet.

However, the government had allowed a private consortium "" Combatta "" to undertake ground handling services at certain airports.

Ground handling services offer a huge business potential for carriers with the recent boom in the aviation sector. The logic is that setting up separate ground handling units is unviable for low cost carriers and small airlines. Instead, they will outsource this to other airlines.

The ground handling services business in India is about Rs 750 crore a year and is projected to double in the next couple of years. The services include passenger, cargo and aircraft handling. The new aviation policy will also give a thrust to raising non-aeronautical revenues.

These include revenues from setting up shopping areas, hotels, duty-free shops as well as other passenger services. In India, non-aeronautical revenues constitute about 22 per cent of the total revenue of the Airports Authority of India against the global average of over 60 per cent.

According to government officials, the thrust on raising non-aeronautical revenues will help in optimal use of the commercial potential of airports and make many airports not only viable but capable of generating surpluses for further expansion and development.

For maximum revenue, airports will have to develop a master plan for development of commercial activities and facilities, as part of the overall master plan approved by the management.

To allot space for companies to operate in airports for commercial activities, new tendering procedures involving limited tenders, two-bid system and grant of management contracts will be devised.

Except for user fees, the government will not intervene and airport operators will have a free hand in raising revenue through non-aeronautical charges.