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Air India and BWFS are the two agencies that provide comprehensive ground handling
CIAL stipulates the new agency to be an Indian company with security clearance from the BCAS
Nedumbassery: In an effort to enhance the degree of competition in the ground handling segment, Cochin International Airport Ltd. has decided to sign up another agency for third-party ground handling services at the airport.
With the move, CIAL will become the first non-metro airport in the country to offer the services of more than two ground handling agencies. At present, Air India and BWFS are the two agencies that provide comprehensive ground handling for the airlines operating here.
In fact, it was the entry of BWFS in 2009 that broke a decade-long monopoly of Air India in ground services at CIAL.
“A couple of our customer airlines have expressed their resentment over the quality of service rendered by one of these agencies and conveyed to us their plans to approach the other agent.
This prompted us to introduce another agency having adequate experience which, in turn, will ensure competition,” said a senior airport official.
The CIAL stipulates the new agency to be an Indian company with security clearance from the BCAS for functioning as a ground handling agency in Indian airports. In addition, the agent should have at least 4 client airlines, including one international carrier, and possess sufficient equipment to carry out the services.
Meanwhile, the proposal appears to have not impressed a majority of the airlines operating here as they fear that the entry of a new player in the segment would lead to a reduction in the quality of service.
“At present, Air India pays 20.5 per cent of its total turnover as royalty where as the BWFS is paying about 35 per cent.
The entry of a third player at an even higher rate will only worsen the situation since these are areas which require huge investment in terms of both infrastructure and money,” said an airline official.
According to him, since the scope of the market was very limited with about 18-odd airlines operating to here but the prices of comprehensive ground handling cannot go beyond the competitively fixed limit. This will make the payers to compromise the quality of service.
Sources said Air India, which was entitled to run ground handling of its own, had entered into bilateral agreements with a couple of international players. This would together account for around 60 per cent of the total ground handling services at the airport.
Moreover, the market share will shrink further if permission is granted to other Indian-registered airlines for carrying out ground handling for their own services in the non- metro airports, they added.
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