New ground handling policy will hit 8,000 jobs, say private airlines

06 Nov 2008

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Airline companies have demanded withdrawal of the new ground handling policy, to be implemented from the beginning of next year, in order to save the jobs of about 8,000 employees of private sector airlines in the country.

About 29 per cent of the 28,000-odd employees working with the private carriers are currently involved in ground handling, but private airlines will not be allowed to undertake the services from next year.

The Federation of Indian Airlines (FIA) plans to make a presentation to the civil aviation ministry saying they will be forced to retrench around 8,000 employees if the government implements the new ground handling policy.

The new policy allows only state-run Air-India, airport operators like GMR and independent companies to do ground handling work.
 
Jet Airways has at least 4,000 employees engaged in ground handling jobs while SpiceJet and IndiGo have 1,800 to 2,000 jobs between them and GoAir has some 350 employees for ground-handling service. Another 2,000 employees do ground handling work for international carriers. There are also thousands of people who are hired as contract labour, airline sources said.

Besides, the new policy will add to the cost of private carriers which are already reeling under the double impact of high oil prices and a falling market due to the global economic downturn.

They argue that ground-handling costs will double as they have to be outsourced to third parties. It would also adversely affect service quality, they point out.

The impact of the new policy will be more industry-wide and will subsequently affect 20,000 jobs overall, sources said.

The government is expected to try a compromise formula under which the customer interaction with the airline will be left to the private airlines and the back-end work would be done by the new players.

But the numbers will, however, have to be still reduced.

A reduction in the prices of aircraft turbine fuel (ATF) has, meanwhile, failed to bolster airlines and analysts expect the brief stock market rally to fizzle out soon.

Jet fuel, or ATF, accounts for nearly 50 per cent of the operational
costs of airlines.

All the three listed aviation stocks - Jet Airways, SpiceJet and Kingfisher Airlines - fell sharply on Wednesday, in line with the overall weakness in the market.

Still, on a weekly basis, Jet is up 23 per cent and SpiceJet up 19 per cent. Kingfisher's weekly gains were wiped out in Wednesday's 17 per cent fall after the company defaulted on lease rentals of four of its jets.

Kingfisher-Deccan combine, meanwhile, has sought an installment facility to clear its dues of about Rs250 crore with the Airports Authority of India (AAI).

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