Consentia on Multidisciplinary Research

THE NEW GROUND HANDLING POLICY: IS IT POLITICALLY MOTIVATED?

INTRODUCTION

Ground handling is a crucial service which is necessitated by an aircraft operator before take-off and after landing. Ground handling is of two types: ramp handling which includes cleaning the plane etc. and traffic handling which includes services like refilling the water tank, air conditioning, wheel chair lifts etc., there is no global standard definition for ground handling. International Air Transport Association (IATA) predicted that by the year 2014, India will be the 5th largest domestic market in the aviation sector[1]. Considering the security apprehensions, the Bureau of Civil Aviation security issued a circular mandating all ground handling service providers to go through security authorization and background checks of its staff prior to issuance of entry pass. Subsequently, DGCA also issued a regulation restricting the number of service providers and self handling by private aircrafts on six major airports in India. This will not only affect the domestic carriers (excluding national carriers) but also international airlines as well. The chief private stake holders in the aviation industry highly criticized the regulation and filed a writ petition in the High Court of Delhi opposing the same but the decision was given in the favor of government of India. So the petitioners moved to the Supreme Court, against the decision of the High Court, the same is pending. This paper will give an over view of the same regulation and the limitations and recommendations for the same.

BACKGROUND

The Directorate General of Civil Aviation (DGCA) issued a regulation in the year 2007, restricting the number of service providers for ground handling services and barred private airlines to carry on ground handling services themselves. The primary reason for issuance of such a regulation were the security apprehensions, as a lot of ground handling agencies were working at the airport without security clearance and background checks. This regulation banned the private aircraft operators to carry out self ground handling service at Mumbai, Chennai, Hyderabad, Delhi, Bangalore and Kolkata. A similar instance can be traced back in the year 1996 when Europe Council Directive 96/67/EC was issued on access to the ground handling market at Community airports. Though, all the features of the Directive were taken into consideration while instituting the regulation which is being passed in India. Before the regulation passed in the year 2007, basically anyone could perform ground handling services, without any restriction on the number of ground handling operators that can provide such services. Now after the regulation passed by DGCA, now only the following can provide the ground handling services at 6 major airports in India[2]:

  1. Subsidiary companies of the national carrier AI i.e. Air India.
  2. The airport operator itself or the joint venture partner of the airport operator.
  3. Any ground handling service provider who has been selected through competitive bidding and who has achieved security clearance from the government, provided that he has to share the profits with the airport operator.

 

GROUND HANDLING REGULATION IN INDIA

In India the estimated size of the ground handling market is about rupees 1500-2000 crores and this market is growing at a rapid pace and according to the predictions of International Air Transport Association (IATA), by 2014 India will be the fifth largest domestic market with about 69 million passengers[3]. So it seems that ground handling is one of the most significant parts of   airline services in India and so it can be understood that any law regulating this market will have great impact on the major stake holders of the service.

The first ground handling regulation was introduced in the year 2000 where aircraft operators were given option by the Airport Authority of India (AAI) to carry out their ground handling services on their own at an airport or make use of the services of any of the following[4]  :

  • Airports Authority of India (AAI).
  • The two national carriers of India (Air India & Indian Airlines).
  • Any ground handling company licensed by AAI.

During this period, Air India and Indian Airlines controlled the majority of the ground handling services in India. Privately owned companies like Cambata Aviation could only have 20-25% market access. Subsequently, the government opened the market for foreign direct investment up to 74% which saw the entry of many new ground handling companies[5].

But in the year 2007 the Directorate General of Civil Aviation in India issued a regulation on ground handling, restricting the number of service providers and self handling by air craft operators at six major airports in India because of security reasons and this particular act of DGCA attracted wide criticism from the private airline community as ground handling constitutes an integral and inalienable part of any airlines‟ business and it is one of the main and unique, selling proposition of the airlines differentiating the services provided by one particular airline from their competitors because of this regulation these airlines will no longer be able to maintain their USP and control the quality, cost and efficiency, level of performance that helped in providing comfort and satisfaction to the passengers which in turn is going to affect the profitabity of their business. The criticism was also based on the fact that the private airlines would lose their competitive edge by assigning their ground handling job to either to Air India, one of their competitors, or to airport operators.

The domestic airline operators had filed a petition in the High Court of Delhi in November 2010 challenging the new regulations. The court dismissed the writ petition in March 2011.Thereafter SLP was filed in the Supreme Court challenging the order of Delhi High Court and the same is pending in Supreme Court.

 

RECOMMENDATIONS

Following are some of the recommendations which according to the authors can help in the achievement of the above mentioned objective.

  1. An effective security scheme must be devised at all airports in the country including the implementation of AEC program by the BCAS. The security scheme should to be checked from time to time[6].
  2. DGCA must implement safety standards related to ground handling regulation together with the criteria for safety clearance of all ground handling entities. Once the standards are set, the performance of the standards must be audited at regular intervals[7].
  3. The safety and security regulators of India (DGCA & BCAS) must come to a combined conclusion on which entities would be accountable and responsible for the different activities of ground handling at airports.
  4. Airline operators must be allowed to choose from several different options of ground handling service providers including self-handling as per the recommendations given by ICAO. If, in any reasonable case, limitation to self-handling is imposed at the airports, it must be based on relevant, transparent and non-discriminatory factors.
  5. AERA must either set its own quality standards for various ground handling services or monitor the performance of the quality standards set by the airport operators in the country (if that complies with international standards).

CONCLUSION

Due to security reasons the Government of India in the year 2007 prohibited the private airlines to perform self-handling and the number of service providers was also restricted at six major airports of India. This particular act of the government invited criticism from the private airlines and resulted in the divided opinions in the aviation industry of India.

A similar instance can be traced back in Europe in October 1996, when Europe Council Directive 96/67/EC were issued for ground handling at community airports, though all the directives were not similar to those of regulation passed in India.

India being a growing market of aviation needs an effective rules and regulations to handle ground handling operations and so the making of these rules and regulations must be free from any politically motivated factors.

*3rd Year student, B.A. LL.B., College of Legal Studies, University of Petroleum & Energy Studies, Dehradun, Uttarakhand, India.

Email: 1993arpita@gmail.com.

**3rd Year student, B.B.A. LL.B., College of Legal Studies, University of Petroleum & Energy Studies, Dehradun, Uttarakhand, India.

Email: pjsngh225@gmail.com.

[1] Nedumbassery, IATA: 800 million more air passengers by 2014, The Hindu, (February 23, 2011) available at http://www.thehindu.com/todays-paper/tp-national/tp-kerala/iata-800-million-more-air-passengers-by-2014/article1482532.ece, accessed on 7th April 2014.

[2] Nilanthi Cassia Paulus, Ground handling regulation in India – a comparison with international policies & practices thesis, RMIT University, July 2011.

[3] Nedumbassery, (n 1)

[4]  ibid

[5] ibid

[6]   BCAS. 2011. Airport Entry Card (AEC) Program – Card, Readers & Biometrics Technologies. Available: http://bcasindia.nic.in/news/techspbiomet1206.pdf [Accessed 10 April 2014].

[7] Ibid.

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