GHIAL to halve handling fees

Ministry softens towards domestic carriers.

GMR Hyderabad International Airport Ltd (GHIAL), the consortium operating the new Hyderabad airport, today offered to halve ground-handling charges even as the civil aviation ministry allowed the domestic carriers to undertake their ground-handling till January 1, 2009.

This will give the two sides enough time to resolve the contentious issue, which almost jeopardised the opening of the new airport and forced a postponement once.

"The ministry has allowed the airlines to do their own ground-handling till such time as the issue over high rates is resolved between the airlines and the new service providers," said Rajesh Verma, executive vice-president, Kingfisher Airlines, to Business Standard. The development took place late tonight.

To compensate for the loss to the ground-handling companies "" Menzies Bobba Aviation and a consortium of Air India-Singapore Airport Terminal Services(SATS) "" the airport developer has also decided to forego its 25 per cent share of revenues.

These moves follow strong protests from domestic carriers against the airport's original decision to charge a stiff Rs 19,000 per aircraft.

Domestic airlines had also opposed the government's move to disallow them from operating their own ground-handling operations and compulsorily outsource to companies mandated by the airport operator, a demand that has now been conceded to by the government.

GHIAL had reduced rates to Rs 12,500 for low-cost carrier SpiceJet in the last couple of weeks and has now offered a further cut to Rs 9,500.

However, face-off continued with the two unable to come to an agreement over ground-handling charges three days ahead of commercial operations.

But with the carriers being allowed to do their own ground- handling, there will be enough time for the two sides to come to a settlement on the issue after January 1, 2009.

GHIAL said an amicable agreement will be reached but airline executives said today's new offer is still much higher than what they spend on their own ground-handling services.

Hectic negotiations were on between carriers and ground-handling companies and the price could be brought down to between Rs 7,000 and Rs 8,000.

At the moment airlines which undertake their own ground handling spend around Rs 5,000 to Rs 6,000 per flight. If they outsource, prevailing rates in airports like Mumbai and Delhi are around Rs 8,000.

Said Wolsgang Prock-Schauer, CEO of Jet Airways, the country's largest private airline: "We have not signed a ground-handling agreement with GHIAL. Their costs are too high, we want to continue self handling and we are prepared for that."

New airport to start on March 23

The new Hyderabad airport has received a notification from the ministry of civil aviation to start operations from March 23. The airport, the first of the new facilities under the public-private model to start operations, was originally meant to start on March 16.