Connect with us

Business

GHAI employing 50,000 people demands bailout

Published

on

GHAI

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 is 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 that 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 current 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 extraordinary 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 it 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. Aviation industry veteran Pervez Damania said, “The government needs to come out and do something for the aviation industry. The aviation is the backbone of the India growth story and now has been hit badly. Hence, the government should come out with a strong support in form of subsidy and interest-free loans. Unless the government comes with a big support package, the industries of tourism and airlines would not be able to survive.”

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *