Ground handling operators seek govt support to help tide over the pandemic-induced crisis
The civil aviation ministry must consider advising the banks to provide a moratorium on interest charges on loans for a period of at least two years.
Reeling under the impact of the pandemic, ground handling operators have sought government support, including an at least two-year moratorium on interest charges on bank loans and instructions to airport operators not to charge concessions and rental fees till normalcy returns, to help tide over the current crisis.
The industry, which is estimated to have incurred a loss of Rs 800-900 crore in the last financial year due to no international operations that account for around 70% of its total business, also wants the government to reopen the overseas flights in a planned and restructured manner.
In a representation to the civil aviation ministry recently, industry body Ground Handling Association of India (GHIA) said the last many months have been “challenging” for the industry, and given the situation, the government needs to come up with considerations and support measures to help it survive this challenging phase.
The civil aviation ministry must consider advising the banks to provide a moratorium on interest charges on loans for a period of at least two years.
“It should also consider instructing the Airports Authority of India (AAI) not to enforce operations, management, development agreement (OMDA)-related royalties on the airport operators and further instructing airport operators to translate the same down the line to all stakeholders, including ground handlers,” GHAI said in the representation.
The association comprises players that are into ground handling activities across major airports in the country. These include Turkish aviation firm Celebi, Indo Thai Airport Management Services, Air Asia SATS, and Bhadra Ground Handling Services.
It has also sought a stimulus to sustain salary payment and allow subsistence allowances to minimise retrenchment. The association said the ground-handling companies have taken a lot of effort to build skill sets and it will be unfortunate if the industry is pushed to go through massive retrenchments.
It also said the civil aviation ministry should consider instructing airport operators not to charge concession and rental fees until normalcy of operations is achieved while urging it to relook at the “highly-regulated” environment under which the industry operates.
“Despite being on a light touch evaluation, the process has become increasingly challenging when it comes to bonafide tariff revisions,” it stated.
The association said deferring the commencement of regular commercial international flight services month after month is not helpful.
It called for creating a structured plan and system to get international flights scheduled back on track, as the main revenue for the operators in this business comes from the international carriers.
“Now, with the current situation on hand, it is increasingly important that going forward, AERA (Airports Economic Regulatory Authority) adopts a policy of dealing with us with considerations keeping in view the reduced volumes and inadequate returns that we face on our investments at the airports we operate,” it said.
There is no way the industry players will be able to justify the interest cost, cost of equipment upkeep wages, and many more allied expenses with the minuscule revenues generated by the ground handling companies, it added.