Airport ground handling industry employing 50,000 people demands bailout

The ground handling industry association’s letter to the Ministry of Civil Aviation, accessed by The Daily Guardian, says it cannot afford to sustain monthly salary bill of Rs 120 crore when there is zero revenue.

With airlines not operating flights for over 40 days now, the airport ground handling industry employing 50,000 employees all over India is in a precarious situation. The Ground Handling Association of India (GHAI) companies have requested a bailout from the Government of India in the form of a sustenance allowance. This is so because these companies are dependent on airlines for their revenue.

Speaking to this writer, Shyam Malani, Director, Indo Thai Airport Management Services, said, “The ground handling services industry are earning absolutely zero revenue as airlines are not operational. It will take many months for the industry to come out of this stress.”

The letter, submitted by Murali Ramachandran, president, GHAI, to the Ministry of Civil Aviation (MoCA), a copy of which was accessed by this writer, said the current situation could bring the industry to the brink of closure. With all international flights stopped, the ground handling industry lost whatever residual revenue that was left after domestic flights were stopped. It will take up to a year for the situation to normalise.

In the present situation, it is impossible for the industry to afford sustain a monthly salary bill of Rs 120 crore and other costs of statutory obligations, loan repayment to the financial institutions along with the interest, royalty payments, land and space rentals and the minimum guarantee fees, utilities charges etc. of about Rs 75 crore. This will bring the ground handling business to a complete closure, Ramachandran said.

MoCA has yet to declare this extra-ordinary situation as a “Force Majeure” whereas the Delhi High Court in a recent case has agreed that the present situation is clearly a “Force Majeure” situation, said GHAI in a statement.

The GHAI has demanded that the MoCA direct all airports to not charge rentals for both city and air sides terminal and ramp space should be charged. Also, no concession fees should be charged till further notification of the Government, which would come after the return of normalcy in air operations.

The association has explained that financial support from the government will enable them and ground handling agencies to pay full salaries, alternately permit them to pay a sustenance allowance to the large workforce till the operations return to normalcy and they reach the January 2020 levels of business revenue.

It must be recalled that this is the third time, the GHAI has approached the MoCA urging them to treat this as an SOS and issue directions towards this end to prevent the industry from closing down and putting a large portion of the 50,000 jobs at risk.

Other demands of GHAI include, deferment of employment-related statutory dues like provident fund and ESIC without any interest. Moratorium on bank related repayments for a period of a year. GST payments should be done on realization, instead of accrual, and a moratorium of 180 days on payments due going forward. Also, collateral-free borrowing at low interest rates for working capital.