India’s Ministry of Civil Aviation Backtracks, Cancels Proposed Policy Change Regarding Ground Handling at Metro Airports

Reading through the headlines of The Pioneer this morning, one grabbed my eye. The Ministry of Civil Aviation is backtracking on their decision to restrict the ground handling industry.

Back in 2007, a proposal was put forward to only allow 3 companies can handle for airlines at metro airports (Delhi, Mumbai, Bangalore, Chennai, Hyderabad, and Kolkata). Singapore Air Terminal Services (AI-SATS), a company chosen by the airport operator, and a company chosen by competitive bidding. All airlines, including international carriers, would have been forced to contract out their ground handling to one of these 3 companies.

This policy was set to take effect in December. The Ministry of Civil Aviation justified this proposal using a vague “security purposes” argument. It still isn’t quite clear what the security advantages of this proposed policy is.

As you can imagine, the airlines didn’t like this proposed policy at all. Reducing competition would only drive up costs and reduce quality of services, something which India’s financially troubled carriers can’t really afford right now. They went to court to try to get the implementation of the proposal stopped, and the court decision was expected early next month.

I’m happy to hear that airlines didn’t have to waste money on that court appearance. The Ministry’s decision seems almost shockingly rational, considering their track record recently. I guess Ajit Singh is in a good mood these days…