GHIAL to get less revenue from ground-handling firms

GMR Hyderabad International Airport Ltd (GHIAL), the public-private consortium operating the first new airport to start commercial operations, has reduced the revenue stream from the two mandated ground-handling companies Menzies Bobba Aviation and a consortium of Air India-Singapore Airport Terminal Services (SATS).

Under a new agreement finalised, the two companies will have to pay 5 per cent of annual revenues instead of the earlier 25 per cent, a senior GHIAL executive confirmed.

The move closely follows the civil aviation ministry's decision to allow domestic carriers to conduct their own ground-handling operations till January 2009.

The decision was made as a result of demands by domestic carriers, which have complained that outsourced ground-handling charges are more than twice the current rates.

Under the existing policy for greenfield airports, domestic carriers have to compulsorily outsource ground-handling to companies mandated by the airport.

The reprieve given to airlines by the government will offer both carriers and the airport time to thrash out contentious issues on pricing.

The two ground-handling companies, which have invested over Rs 200 crore in new equipment, will not, however, be able to break even in five to six years as originally projected since they will only handle international business for the next nine months.

Most of the aircraft handled from Hyderabad are domestic "" only 30 out of the 270 daily flights are international.

As a result, GHIAL has had no option but to compensate them for the drastic reduction in their business by reducing the revenue share.

Experts said the two were expecting to earn revenues of around Rs 24 crore this year.

Airport authorities, however, are also planning to hold discussions with the ministry because they say they are apprehensive about meeting quality commitments under the agreement with the government as a result of last night's decision.

Sources in GMR, the main private developer, said they have no control over ground-handling operations over the next nine months.