India's Ground Handling Market

INDIA
CAPAIndia
GroundHandling
Report2014
TableofContents
&SampleExtracts
www.capaindia.com
www.centreforaviation.com
TableofContents
Glossary..............................................................................................................................2
ExecutiveSummary............................................................................................................4
GlobalOverviewofGroundHandling...............................................................................24
IndiaAviationOverview...................................................................................................45
Passengertraffic.......................................................................................................................45
Airtransportmovements..........................................................................................................46
Cargotraffic..............................................................................................................................48
FleetSize...................................................................................................................................49
CAPAtrafficandmovementsforecasttoFY2023.......................................................................50
Profilesof10LargestIndianAirports................................................................................59
DelhiAirport.............................................................................................................................59
MumbaiAirport........................................................................................................................67
BengaluruAirport.....................................................................................................................75
ChennaiAirport.........................................................................................................................82
KolkataAirport..........................................................................................................................89
HyderabadAirport....................................................................................................................95
CochinAirport.........................................................................................................................102
AhmedabadAirport................................................................................................................108
GoaAirport.............................................................................................................................114
PuneAirport...........................................................................................................................119
SWOTAnalysisofMetroAirportsfromaGroundHandlersPerspective........................125
BengaluruAirport...................................................................................................................125
HyderabadAirport..................................................................................................................126
ChennaiAirport.......................................................................................................................127
KolkataAirport........................................................................................................................128
MumbaiAirport......................................................................................................................129
DelhiAirport...........................................................................................................................130
GroundHandlingMarketinIndia...................................................................................131
GroundHandlingCosts...................................................................................................137
SubcontractingofGroundHandlingActivities................................................................143
RegulatoryFramework...................................................................................................147
ProfilesofKeyGroundHandlers.....................................................................................153
INDIA
AirIndiaSATSAirportServices................................................................................................154
BhadraIndia............................................................................................................................157
BirdWorldwideFlightServices(BWFS)....................................................................................159
CambataAviationPvt.Ltd.......................................................................................................161
elebiIndia.............................................................................................................................163
elebiNASAirportServicesIndiaPvt.Ltd................................................................................165
GlobeGroundIndia..................................................................................................................167
IndoThai.................................................................................................................................169
MenziesGroup........................................................................................................................171
SWOTAnalysisofKeyGroundHandlers.........................................................................174
DelhiAirportAISATSAirportServicesPvt.Ltd.......................................................................174
DelhiAirportCambataAviationPvt.Ltd...............................................................................175
DelhiAirportelebiGroundHandlingDelhiPvt.Ltd.............................................................176
DelhiAirportBirdWorldwideFlightServicesPvt.Ltd............................................................178
MumbaiAirportAirIndia......................................................................................................179
MumbaiAirportCambataAviationPvt.Ltd..........................................................................180
MumbaiAirportelebiNASAirportServicesIndiaPvt.Ltd...................................................181
BengaluruAirportAISATSAirportServicesPvt.Ltd...............................................................182
BengaluruAirportGlobeGround(India)Pvt.Ltd...................................................................183
ChennaiAirportAirIndia......................................................................................................184
ChennaiAirportBhadraInternationalIndiaLtd....................................................................185
ChennaiAirportCambataAviationPvt.Ltd...........................................................................186
KolkataAirportBhadraInternationalIndiaLtd.....................................................................187
KolkataAirportAirIndia.......................................................................................................188
HyderabadAirportAISATS....................................................................................................189
HyderabadAirportMenziesBobbaGroundHandlingServicesPvt.Ltd..................................190
SelectionofGroundHandlersbyAirlines........................................................................191
Introduction............................................................................................................................191
DelhiAirport...........................................................................................................................193
MumbaiAirport......................................................................................................................193
ChennaiAirport.......................................................................................................................194
KolkataAirport........................................................................................................................195
INDIA
CAPASurveyofKeyStakeholders...................................................................................198
GroundHandlers.....................................................................................................................198
Airlines....................................................................................................................................202
AirportOperators....................................................................................................................207
GeneralAviation.....................................................................................................................212
AnalysisofGroundHandlingTariffsatMetroAirportsinIndiainFY2014.......................214
DelhiAirport...........................................................................................................................214
MumbaiAirport......................................................................................................................215
ChennaiAirport.......................................................................................................................217
KolkataAirport........................................................................................................................219
Appendices.....................................................................................................................223
AppendixA:Domesticairtransportmovementsbyaircrafttype............................................223
AppendixB:CeilingratesofgroundhandlingservicesatmetroairportsinIndia.....................224
AppendixC:ListofgroundhandlingsubcontractorsatmetroairportsinIndia........................225
AppendixD:Listofground/cargohandlersatIndianairports..................................................226
AppendixE:Minimumandaveragewageratesofpersonnelingroundhandling.....................228
AppendixF:Listofground/cargohandlerscoveredunderstudyforfinancialanalysis.............229
AppendixG:Financialanalysisofground/cargohandlingfirmsatDelhiAirport......................231
AppendixH:Financialanalysisofground/cargohandlingfirmsatBengaluruAirport...............247
AppendixI:Financialanalysisofground/cargohandlingfirmsatBengaluruAirport................263
AppendixJ:FinancialAnalysisofground/cargohandlingfirmsatKolkataAirport...................268
AppendixK:FinancialAnalysisofground/cargohandlingfirmsatHyderabadAirport.............270
AppendixL:FinancialAnalysisofground/cargohandlingfirmsatLucknow,Jaipurairports.....271
AppendixM:FinancialAnalysisofground/cargohandlingfirmsatCochinAirport...................272
AppendixN:FinancialAnalysisofground/cargohandlingfirmsatBhubaneshwarAirport.......274
AppendixO:Financialanalysisofground/cargohandlingfirmsatTrivandrumairport.............275
AppendixP:Groundsupportequipmentwithselectdesignatedgroundhandlingfirms..........276
INDIA
CAPAIndiaGroundHandlingReport2014
INDIA
Figure12:Airtrafficmovementsbyaircrafttype,FY13
Market
segment
Domestic
Narrowbody
99%
International
Widebody
1%
Narrowbody
3040%
Widebody
6070%
Source:CAPAResearch,AirportIS
Note:Widebodyoperationsondomesticroutesweremainlypositioningflights
The majority of Indian domestic routes have a flight time of 2.5 hours or less making them most
suitablefornarrowbodyorregionalaircraft.Inthefuture,onhighdensityroutesatslotconstrained
airports such as Mumbal we may see the deployment of wide body aircraft, however these will
accountforarelativelysmallshareofthenationaltotal.
Internationalservicesoperatedbyforeigncarriersaredominatedbywidebodyaircraft,howeverthe
proportion of narrow body equipment has been increasing as a result of the entry of low cost
carriersoperatingregionalinternationalroutestoIndiafromtheGulfandSoutheastAsia.Andgoing
forward,reenginedA320neosand737MAXaircraftwillbeeconomicaloveralongerrangemaking
themsuitablefordeploymenttoalargernumberofinternationaldestinations.
Table5:Top10marketsforpassengerhandling,internationalservices,widebodyaircraft,FY13
Airport
Estimatedmarketsize(USDmillion/year)
Delhi
Mumbai
Chennai
Bengaluru
Cochin
Hyderabad
Kolkata
Trivandrum
Calicut
Ahmedabad
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
Source:CAPAResearch
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Figure13:Estimatedvalueofmarketsegmentsforgroundhandling
Market
segment
Domestic
services
International
services
Indiancarriers
Indiancarriers
(USDxxmillion
(USDxxmillion)
Foreigncarriers
(USDxxmillion)
Source:CAPAResearch
The international ground handling market in India, which is the aggregate of Indian and foreign
carriers operating international services, was estimated at USDxx million in FY13 and represented
more than xx% of the market opportunity, see Figures 14 and 15. The international segment was
estimatedatxx%Indianandxx%foreigncarriers.
Figure14:Estimatedaveragemarketopportunitybycustomersegment,FY13(USDmillion)*
xx
xx
Domesticflights
Internationalflights(domesticcarriers)
xx
InternationalFlights(foreigncarriers)
Source:CAPAResearch
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Figure15:Relativeshareofdomesticandinternationalhandlingmarketbyvalue,FY13(%)
28%
Domestic
International
72%
Source:CAPAResearch,
CAPA estimates that Delhi was the largest ground handling market in India for both domestic and
internationalservices.Thetop10marketopportunitiesfordomesticgroundhandlingservicesare
listedinTable8andthoseforinternationalservicesareprovidedinTable9.
Table8:Estimatedtop10marketopportunitiesforgroundhandlingDomestic
Airport
Delhi
Mumbai
Bengaluru
Chennai
Kolkata
Hyderabad
Ahmedabad
Guwahati
Pune
Goa
Marketsize(USDmillion/year)
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
Source:CAPAresearch
Table9:Estimatedtop10marketopportunitiesforgroundhandlingInternational
Airport
Delhi
Mumbai
Chennai
Cochin
Calicut
Bengaluru
Hyderabad
Kolkata
Trivandrum
Ahmedabad
Marketsize(USDmillion/year)
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
xx.xxx.x
Source:CAPAresearch
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Royaltychargesatmetroairports
Figure17:Royaltychargesatmetroairports
S.No.
Airports
Groundhandlingfirms
Royaltycharges
Delhi
AISATSAirportServicePvt.Ltd
xx%ontherevenueearnedasperthe
ceilingrates
xx%ongrossrevenues
xx%ongrossrevenue
BirdWorldwideFlightServices(India)Pvt.Ltd.
CambataAviationPvt.Ltd.
elebiGroundHandlingDelhiPvt.Ltd.
xx%ongrossrevenuesor12.75%on
revenuesearnedaspertheceilingrates
Mumbai
AirIndia
elebiNASAirportServicesIndiaPvt.Ltd.
xx%ofgrossrevenue
xx%ongrossrevenues
xx%ongrossrevenues
Chennai
AirIndia
BhadraInternationalIndiaLtd
n/a
xx%ongrossrevenues
xx%ongrossrevenues
Kolkata
AirIndia
BhadraInternationalIndiaLtd
n/a
xx%ongrossrevenues
Bengaluru
AISATSAirportServicePvt.Ltd
GlobeGround
xx
xx
Hyderabad AISATSAirportServicePvt.Ltd
MenziesBobbaGroundHandlingServicesPvt.
Ltd.
xx%onrevenueearnedfrom
internationalsector
xx%onrevenueearnedfrom
internationalsector
Source:CAPAResearch,AERA,Companyfilings
Note:n/aNotavailable
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TheestimatedmanpowercostperprocessatthesixmetroairportsispresentedinTables13and14.
Theseareaggregatedcostsandvarybymetro,dependingonminimumwagerequirements,costof
living,andmarketforcesineachmetro.Manpowerallocationvarieslargelydependingonthetype
ofoperation(domesticorinternational).
Table13:Averagemanpowercostsformetroairportsbyprocess*
Domesticflights,FY13(USD/day)
Airport
Cabincleaning
Ramp
Passenger
processing
x
x
x
x
x
x
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
Delhi
Mumbai
Kolkata
Hyderabad
Bengaluru
Chennai
Source:CAPAResearch,*costshavebeenaveragedoutacrossairlines
Table14:Averagemanpowercostsformetroairportsbyprocess*
Internationalflights,FY13(USD/day)
Airport
Cabincleaning
Ramp
Passenger
processing
x
x
x
x
x
x
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
Delhi
Mumbai
Kolkata
Hyderabad
Bengaluru
Chennai
Source:CAPAResearch,*costshavebeenaveragedoutacrossairlines
Assetcosts
Assetcostsforvariousprocessesarelargelythesameacrossairportsanddonotvarybygeography.
Thesecostsarelargelydrivenbythenatureoftheequipmentandvarybythetypeofaircraft.CAPA
hasdevelopedestimatesforassetcostsforbothhubaswellasspokestations,basedonexhaustive
researchandprimaryresearch,andthesearepresentedinTables15and16.
Theseestimatesreflectthecostsofnewassets,asrequiredunderthepolicy.However,ithasinthe
pastbeencommontoseealargesecondarymarketforthepurchaseofequipment.Actualcostsmay
varydependingonvolumepurchases,depreciatedvalues,negotiatingpower,andtheusefullifeof
theequipment.
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Table15:Minimumequipmentrequiredfornarrowbodyflightsataspokestationandindicative
costs,FY13
S.No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Equipment
Number(s)required
Unitcost(USD)
1
4
1
2
1
2
2
1
1
1
1
2
1
2
6
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Aircraftwheelchocks
Baggagedollies
Crewcoach
Dieseltractor
Groundpowerunit
Marshallingtorchpads
Motorisedconveyorbelt
Motorisedpassengerstairs
Passengercoach
Pushback(narrowbody)
Towbars(CodeC)
Towableconveyor/beltloader
Towablestepladder(A320)
Wheelchairs
Cones
Source:CAPAResearch
Table16:Minimumequipmentrequiredfornarrowbodyflightsatahubairportandindicative
costs,FY13
Equipment
Airconditioningunit(65tonnes)
Airstartunit
Aircraftwheelchocks
Baggagedollies
Crewcoach
Dieseltractor
Groundpowerunit
Marshallingtorchpads
Motorisedconveyorbelt
Motorisedpassengerstairs
Passengercoach
Pushback(narrowbody)
Toiletcart
Towbars(CodeC)
Towableconveyor/beltloader
Towablestepladder(A320)
Watercart
Wheelchairs
Cones
Fuel
Insurance
2014CAPAIndia
Number(s)required
Unitcost(USD)
1
1
4
4
1
2
1
1
2
2
2
1
1
1
2
1
1
4
4
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Variable
xx%xx%ofassetvalue
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INDIA
DelhiAirportairtrafficmovementsbyaircrafttype:Internationaldepartures
byIndiancarriers
AircraftType
737800wingletspax/BBJ2
A320
777300ERpassenger
A319
A330200
737passenger
777200LRpassenger
A321
737800passenger
787800
737900passenger
A330300
A330
GrandTotal
DeparturesFY13
2,859
2,635
2,086
1,521
1,175
1,076
947
921
337
261
191
38
10
14,057
Source:CAPA,AirportIS
DelhiAirportairtrafficmovementsbyaircrafttype:Internationaldepartures
byforeigncarriers
AircraftType
A330300
A320
777200/200ERPassenger
A330200
777300passenger
767300passenger
777passenger
737800passenger
A330
747400passenger
A340600
A319
757200passenger
777200LRpassenger
A321
A310
767passenger
767200passenger
737300
A340300
7478passenger
777300ERpassenger
MD82
747passenger
2014CAPAIndia
DeparturesFY13
2,543
2,376
1,541
1,334
963
892
879
770
658
533
510
504
501
487
457
391
365
309
261
251
233
227
192
154
58
INDIA
MD11passenger
A340
MD83
787800
737500
757passenger
787
737700wingletspax/BBJ1
737200
A300600passenger
B727passenger
757200wingletspassenger
737700passenger
767400passenger
A340500
E190
737passenger
GrandTotal
137
97
63
62
44
43
41
32
19
19
15
8
2
2
2
2
1
17,920
Source:CAPA,AirportIS
GroundhandlingcostsperDeparture:LCCs
AsperCAPAestimatesderivedfromaproprietarymodelandextensiveprimaryresearch,handling
costsforlowcostcarriersonaperdeparturebasisoutofDelhiareestimatedasbelow:
Airline
Aircraft
Costperdeparture(INR)
IndiGo
SpiceJet
SpiceJet
GoAir
A320
737
Q400
A320
xxxxxx
xxxxxx
xxxxxx
xxxxxx
Source:CAPAresearch
Note:allassetcostsarecapitalisedandbasedontheassumptionthatinvestmentismadeintheminimumequipment
requiredtoservicethecurrentvolumeofdepartures.AstheheadquartersforSpiceJetandIndiGo,thecostsatDelhialso
includeanallocationformanagementandtrainingcosts.
GroundhandlingcostsperDeparture:FSCs
Estimatedhandlingcostsperdepartureforfullservicecarriersareasbelow:
Airline
A/C
AirIndia
Jet
Narrowbody(dom)
Widebody(Intl.)
Narrowbody(dom)
Widebody(Intl.)
Costperdeparture(INR)
xxxxxx
xxxxxx
xxxxxx
xxxxxx
Source:CAPAresearch
Note:allassetcostsarecapitalisedandbasedontheassumptionthatinvestmentismadeintheminimumequipment
requiredtoservicethecurrentvolumeofdepartures.ForAirIndiathisincludesmanagementandtrainingcosts;numbers
forJetincluderegionalaircraftbutexcludeJetKonnect.
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Numberofoutsourcedemployees
According to CAPA Research findings based on extensive engagement with key stakeholders
the level of outsourcing of manpower for domestic operations is lower than that for international
operationsforbothcabincleaningandramphandling.Table18presentsthenumberofoutsourced
employeesperdepartureforthesetwoactivities.
Table18:Numberofoutsourcedstaffperdeparturebyactivity
Domesticoperations
Internationaloperations
Cabincleaning*
Ramp**
xx
xxxx
xxxx
xxxx
Source:CAPAResearch,companyfilings
*Cabincleaningfigureincludeslavatoryandpotablewaterservices
**Rampfigureincludesmanpowerforbaggagetransportation,sorting,andairsideloading/unloading
Table 19 presents CAPA estimates for the number of outsourced employees at the top 10 Indian
airports.Wedevelopedthesenumbersonthebasisofourproprietarymodeloflabourrequirements
byactivitysupportedbyonthegroundindustryinputs.
Table19:Numberofoutsourcedgroundhandlingstaff attop10airports
Airport
Delhi
Mumbai
Bengaluru
Chennai
Hyderabad
Kolkata
Cochin
Ahmedabad
Pune
Goa
Numberofoutsourcedemployees
xxxxxxxx
xxxxxxxx
xxxxxxxx
xxxxxxxx
xxxxxxxx
xxxxxxxx
xxxxxxxx
xxxxxxxx
xxxxxxxx
xxxxxxxx
Source:CAPAresearch
Theseoutsourcedemployeesareoverandabovethoseonthedirectpayrollsofthegroundhandling
firms. If the final policy ruling prohibits subcontracting as the government is seeking to achieve,
thesestaffwillhavetobeemployeddirectlybytheauthorisedgroundhandlingfirms.
This will drive up overall labour costs because most of the subcontracted labour is currently
employedonthebasisofdailywages(oftenbelowtheminimumrate),withnotenureandfewifany
additionalbenefitssuchasleave,providentfundandmedical.
Formalising their employment on terms compliant with statutory regulations and providing a safe
working environment will result in increased costs. Handling firms will need to further invest in
trainingthesestafftoincreasetheirproductivitytomitigatetheincreasedexpenses.
2014CAPAIndia
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Currently,thevolumeofmanpoweroutsourcedbythefiveprivatedomesticairlinesisgreaterthan
thenumberofhandlingrelatedemployeesthattheyemploydirectly.Figure20providesthenumber
of onroll and outsourced staff engaged in handling activities for the five Indian airlines at the six
metroairports.
Figure20:EmploymentstatusofstaffengagedinhandlingactivitiesforthefiveIndiancarriersat
thesixmetroairports,FY11
Outsourced
6,210(39%)
Onpayroll
9,744(61%)
Source:CAPA,HighCourtfiling
Employeestrengthofgroundhandlingfirms
InFY12,eightgroundhandlingfirmsAirIndia,Cambata,elebiNAS,BirdWorldwideFlightServices
(BWFS),BhadraInternational,GlobeGround,elebiandIndoThaihandledthemajorityofaircraft
departuresatIndianairports.Thesegroundhandlingfirmsemployedcloseto25,000staff.Theyalso
makesomeuseofsubcontractingagencieshoweverinthecaseoftheauthorisedgroundhandlers
thisrepresentslessthan5%oftheirtotalstaffdeployment.
Table20:NumberofemployeeswithdesignatedGHfirms
Company
AirIndiaLimited
BhadraInternationalIndiaLtd.
BirdWorldwideFlightServices
CambataAviationPvt.Ltd
elebiGroundHandlingDelhiPvt.Ltd.
elebiNASAirportServicesIndiaPvt.Ltd.
GlobeGroundIndia
IndoThaiAirportManagementServicesPvt.Ltd
Total
Employeestrength(FY12)
10,481
1,396
1,979
7,000
678
2,125
1,017
93
24,769
Source:CAPAResearch,Companyfilings,AERA
Note:numbersmayincludeoutsourcedmanpower
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Majorsubcontractorsatmetroairports
Outsourcedmanpowerisusuallyprovidedbysubcontractors(definedasfirmsprovidingmanpower
orGSEservicestodesignatedgroundhandlersorairlinesthatareselfhandling).Thereareseveral
subcontractors present throughout the country and it is a largely unstructured and unorganised
market.MajorsubcontractorsforthesixmetroairportsarelistedinTable21.
Table21:Majorsubcontractorsatmetroairports
Station
Supplier
Services
Delhi
LionManpowerSolutionsPvt.Ltd.
NehaAviationServices
AroonAviationServices
SunshineEnterprises
AgarwalPackersandMovers
JACAirServices
LivewelAviation
TurboAviation
TaurusAviation
VisskanAviation
AirawatAviationServices
SteaderInternational
KrystalAviation
Manpowersupplier
GSEprovider,manpowersupplier
Manpowersupplier
Manpowersupplier
Manpowersupplier
Aircraftcleaningservices
LivewelAviation
VisskanAviation
Hyderabad
Mumbai
Bengaluru
Kolkata
Chennai
DcorDrapesAviationServicesPvt.Ltd./Dcor
AviationPvt.Ltd
BengaluruAirportTerminalServices
JPAviationServices
AbleAviation
JaiSantoshiMaa
IdealCleaning
TranstrackServices
StarAviationServices
UniversalAviationServices
KaziAviation
KrystalAviationServices
SanthamContractors
GSEprovider,manpowersupplier,catering
services
Cabincleaningservices,groundhandling
Manpowersupplier
Manpowersupplier,handlingservices
Manpowersupplier
Cabincleaning
Manpowersupplier
Manpowersupplier
Manpowersupplier
Source:CAPAResearch
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FinancialanalysiselebiGroundHandlingDelhiPvt.Ltd.
Keyfinancialresults(USDmillion)
FY12*
FY11*
FY10
Totalincome
Totalexpenditure
Interest
Profit/(loss)beforetax
Provisionforincometax
5.84
4.90
1.63
(3.26)
0.00
1.7
(5.1)
n/a
(3.5)
0.0
n/a
n/a
n/a
n/a
n/a
Netincome
(3.26)
(3.5)
n/a
8.89
12.76
13.13
11.57
1.68
9.89
2.46
2.19
0.28
0.50
n/a
23.15
12.0
11.1
23.1
11.3
1.2
10.2
10.2
1.2
9.0
0.1
3.8
23.1
11.2
0.0
11.2
0.0
0.0
0.0
11.1
0.3
10.8
0.0
0.3
23.1
FY12
FY11
FY10*
(55.73)%
(55.73)%
(15.53)%
n/a
1.44
1.13
204.2%
203.7%
(14.9)%
n/a
0.9
8.5
n/a
n/a
n/a
n/a
0.0
38.9
Keyratios
Profitability
EBIT/operatingincome
PAT/operatingincome
ROCE
Solvency
Interestcoverage
Debttoequityratio
Liquidity
Currentratio
Shareholders'equity
Debt
Totalliabilities
Grossfixedassets
Depreciation
Netfixedassets
Currentassets
Currentliabilities
Netcurrentassets
Otherassets
Profitandlossaccount
Totalassets
Thegroundhandling
businessismarkedby
highoperating
leverage,asthe
majorityofcostsare
fixed.
Consequently,elebi
GroundHandling
beinginitssecond
yearofoperations
reportedalossof
USD3.26millionin
FY12.
elebihasbeen
aggressivelypursuing
newclientsfor
growthinaprice
sensitivemarket,
whichisevidentinits
growingrevenuesbut
decliningnetprofit.
Thecompanys
currentratiofellin
FY11andFY12.This
canbeattributedto
theloansittookfor
expansioninFY11
andtheincreasein
interestpayments
duetothe
subsequent
depreciationofthe
Rupee.
Source:CAPAResearch,MCA,*somenumbersareCAPAestimatesanddonotrepresentactuals.
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RatingagencyinputsforelebiGroundHandlingDelhiPvt.Ltd.
Ratingassignedtovariousbankfacilities
Facilities
Longtermbankfacilities
Shorttermbankfacilities
Total
Amount(INRmn)
750
600
1350
CurrentRating
CRISILBB(reaffirmed)
CRISILA4(reaffirmed)
PreviousRating
CRISILBB
CRISILA4
Source:CAPAResearch,CRISIL,asofFeb11,2013
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Capexplansbygroundhandlingfirmsat
selectedairports
Sr.No. Airports
GroundHandler
CapexProjections(INRMillion)
Delhi
Mumbai
3
4
5
6
Bengaluru
Hyderabad
Cochin
Ahmedabad
BWFS
Cambata
elebi
Cambata
elebiNAS
GlobeGround
MenziesBobba
BWFS
Cambata
FY13
x.x
x.x
x.x
x.x
x.x
x.x
x.x
x.x
x.x
FY14
x.x
x.x
x.x
x.x
x.x
x.x
x.x
x.x
x.x
FY15
x.x
x.x
x.x
x.x
x.x
x.x
x.x
x.x
x.x
Source:CAPAResearch,industrysources,AERA
2014CAPAIndia
155
INDIA
Airport
Groundhandlers
Varanasi
AirIndia
Nagpur
AirIndia
NAS
Amritsar
AirIndia
IndoThai
Srinagar
AirIndia
IndoThai
Guwahati
AirIndia
RudraAviation
NAS
IndoThai
Source:CAPAResearch
FindingsofCAPAsurveyongroundhandlingoperationsinIndia
Policyandregulations
Thegroundhandlingpolicywaspartiallyimplementedatthemetroairports,withairportoperators
selecting third party ground handlers through an international competitive bidding process. The
policyproposedtheexitofsubcontractorhandlingfirms.
Subcontracting plays a major role in the Indian ground handling industry. These subcontractors
provideeithermanpower.However,mostofthesecompaniesareverysmallinsize,withpresence
atonlyoneortwoairports.
The directive to end subcontracting has not been implemented and remains sub judice. Most PPP
airport operators were of the view that the policy should be fully implemented with some
modification.Table27collatestheviewsofairportoperatorsonthegroundhandlingpolicy.
Table27:Viewsofairportoperatorsonthegroundhandlingpolicy
Impact
category
Infrastructure
impact
2014CAPAIndia
Keyimpact
Improvedequipment
utilisation
Improvedstandardof
equipment
Remarks
Limitingthenumberofgroundhandling
operatorswouldimproveequipment
utilisation.
Theproposedpolicyallowsground
handlingfirmstoachievescaleintheir
operationsby:
limiting the number of licensed
groundhandlingfirmsattheairport
and;
prohibiting subcontracting of GH
activities.
172
INDIA
Labourlaws
Human
ResourceImpact
Safetyand
securityimpact
Improvedcompliancewith
labourlaws
Improvedqualityof
workforce
Reducedattrition
Increasedstaffutilisation
Enhancedsafety
Enhancedsecurity
Thisshouldinturnjustifytheinduction
ofmoreexpensiveIATAstandard
groundhandlingequipment.
Accordingtoseveralairportoperators,
subcontractorscommonlyviolatelabour
lawsbynotpayingbenefitsorforthat
mattertheminimumwageinorderto
supportalowcostbase.However,the
licensedgroundhandlersarebelievedto
complywithstatutoryrequirements.
Subcontractorsusuallyprovide
untrainedandunskilledlabourfor
groundhandlingactivities.Themoveto
licensedhandlersisexpectedtoresultin
greaterinvestmentintrainingandthe
developmentofahigherqualitylabour
force.
Subcontractorsusuallydeploy
temporarylabouranddonotfollow
standardHRpolicieswithrespectto
tenure.Withtheimplementationofthe
proposedpolicy,onlypermanent
workerswillbepermittedinground
handlingactivities.Employeeswill
benefitfromenhancedworkingterms
andconditionswhichinturnshould
lowertheattritionrates.
Withairlinesforcedtouseoneofthe
designatedhandlersatanairportrather
thanselfhandlingthisshouldresultin
moreefficientdeploymentofstaffas
resourcescanbesharedacrosscarriers.
Onlytrainedstaffwillbeallowedto
operateequipment.Licensedhandlers
areexpectedtohaveagreaterfocuson
occupationalhealthandsafetythanthe
currentsubcontractors.
Thegreaterdeploymentofpermanent
staff,employedbyahandfuloflicensed,
professionalcompaniesshouldimprove
theabilitytomonitorpersonnelfor
securitypurposes.Thecurrent
multiplicityofcompaniesemploying
itinerantandunskilledworkersfor
airsiderolesisunmanageable.
Source:CAPAResearch
2014CAPAIndia
173
INDIA
Table30:Proposedandapprovedcomprehensivetariffsforgroundhandlingofscheduled
passengeraircraftbyAISATS
Aircrafttype
CodeB
CodeC
CodeD
CodeE
CodeF
Domestic(INR)
International(INR)
Proposedcharges Chargesapprovedby
AERA
14,351
12,700
12,204
10,800
19,323
17,100
64,410
57,000
114,582
101,300
Proposedcharges
Chargesapprovedby
AERA
55,700
93,200
153,100
180,000
251,000
63,054
105,316
173,003
203,287
282,630
Source:CAPAResearch,AERA
Mumbaiairport
InFY14,thefollowingthreegroundhandlingfirmswereoperatingatMumbaiairport:
AirIndiaLimited
elebiNASAirportServicePvt.Ltd.
Table31belowprovidesAERAapprovedtariffsforscheduledpassengeraircraftservicedbyelebi
NASduringFY14attheairport.
Table31:Comprehensivetariffsforgroundhandlingofscheduledpassengeraircraft
Aircrafttype
Domestic(INR)
International(INR)
Paxterminal
services
Ramp
handling
Total
Paxterminal
services
Ramp
handling
Total
3,800
3,200
4,500
19,100
38,100
8,900
7,600
12,700
38,100
63,500
12,700
10,800
17,200
57,200
1,01,600
11,000
23,500
30,400
35,600
55,000
33,000
69,900
1,23,000
1,44,700
1,97,000
44,000
93,400
1,53,400
1,80,300
2,52,000
CodeB
CodeC
CodeD
CodeE
CodeF
Note:CeilingratesareaspertheconcessionagreementwithMumbaiInternationalAirportPvt.Ltd.,dated14November
2008.Theseratesareexclusiveofgovernmenttaxesanddutiessuchasservicetaxandtheconcessionfeepayabletothe
airportoperator.
TheapprovedFY13tariffsforgroundhandlingservicesprovidedbyCambataAviationattheairport
forscheduledpassengeraircraftareprovidedbelow.
Aircrafttype
A320
737
A330
A340
747
2014CAPAIndia
International(INR)
123,200
134,400
196,000
151,200
173,600
180
INDIA
747200
747SP
767
777
A330600
209,440
173,600
176,400
154,000
173,600
Note:Tariffsprovidedinthetableareinclusiveofroyaltiespayabletotheairportoperator.
Air India also provides ground handling services at Mumbai airport. It has submitted its tariff
proposal to AERA and the proposed rates are provided in Table 32. In its proposal, Air India has
proposed to retain existing tariffs for ground handling services for the entire control period. In
addition, it has stated that in case of any revision it will approach AERA. As Air India has not
proposedanyincreaseingroundhandlingcharges,AERAiscurrentlyconsideringthissubmissionof
AIfordeterminationoftariffsforgroundhandlingservicesprovidedbyitatMumbaiairport.
Table32:ProposedtariffsforgroundhandlingofscheduledpassengeraircraftbyAirIndia
Aircrafttype
Transit
A320/737
707/IL62/757
A330/A310/767/A330
747/A340/777
1,310
1,455
2,882
3,413
Turnaroundwithin4 Turnaroundbeyond
hours
4hours
1,799
1,999
3,914
4,665
2,008
2,231
4,432
5,279
Note:NumbersareinUSD.
ForconversionofUSDintoINR,RBIreferencerateasonthefirstdayofthemonthforthefirstfortnightlybillingperiodand
therateprevailingasonsixteenthdayofthemonthforthenextfortnightlybillingperiodshallbeadopted.
Airportlevyandservicetaxwillbechargedadditionally
TimeIimitforuseofequipmentperflightisasfollows:
2hoursfortransitflights
2hours30minutesforturnaroundwithin4hours
3hoursforturnaroundbeyond4hours
Flightshandledbetween0001Hoursand0400Hourswillbechargeda15%peakhoursurcharge.Handlingincaseof
technicallandingforotherthancommercialpurposewillbecharged50%oftheaboverates,providedthereisnophysical
changeofload.
Handlingincaseofreturntorampwillnotbechargedextra,providedthataphysicalchangeofloadisnotinvolved.
Handlingincaseofreturntorampinvolvingaphysicalchangeofloadwillbechargedasforhandlingincaseofatechnical
landing
NoextrachargewillbeimplementedforprovidingtheservicesonSaturdays,Sundays,andpublicholidays.
Chennaiairport
During FY14, the following three ground handling firms provided ground handling services at
Chennaiairport.
AirIndia
BhadraInternationalIndiaLtd.
2014CAPAIndia
181
INDIA
AppendixE:Minimumandaveragewageratesofpersonnel
employedingroundhandling
Minimumwageratesforgroundhandlingstaffacrosssixmetros(inUSD)
City
ClassificationofLabourSkill
Skilled
Semiskilled
Unskilled
Delhi
x.xx
x.xx
x.xx
Mumbai
x.xx
x.xx
x.xx
Bengaluru
x.xx
x.xx
x.xx
Chennai
x.xx
x.xx
x.xx
Hyderabad
x.xx
x.xx
x.xx
Kolkata
x.xx
x.xx
x.xx
Source:CAPAResearch,numbersareinUSD/hour
Averagewageratesforgroundhandlingstaffacrosssixmetros(inUSD)
Role
Bengaluru
Chennai
Delhi
Hyderabad
Kolkata
Mumbai
Airside
Cabincleaning
Supervisor
Salary/month Salary/month Salary/month Salary/month Salary/month Salary/month
xxx
xxx
xxx
xxx
xxx
xxx
Staff
xxx
xxx
xxx
xxx
xxx
xxx
Ramp
Supervisor
xxx
xxx
xxx
xxx
xxx
xxx
Staff
xxx
xxx
xxx
xxx
xxx
xxx
BusDrivers
xxx
xxx
xxx
xxx
xxx
xxx
Baggagedrivers
xxx
xxx
xxx
xxx
xxx
xxx
Jetwayoperator
xxx
xxx
xxx
xxx
xxx
xxx
Marshals
xxx
xxx
xxx
xxx
xxx
xxx
Terminal
Gateagents
Supervisor
xxx
xxx
xxx
xxx
xxx
xxx
Staff
xxx
xxx
xxx
xxx
xxx
xxx
Porter
xxx
xxx
xxx
xxx
xxx
xxx
Source:CAPAResearch,numbersareinUSD/monthandonlyincludethecashcomponentofsalary(i.e.benefitsare
excluded)
2014CAPAIndia
193
INDIA
AppendixJ:FinancialAnalysisofground/cargohandlingfirmsat
Kolkataairport
AbleAviationIndiaPvt.Ltd.
Balancesheet(UnitsinUSDmn.)
YoYChange
Sourcesoffunds
Paidupcapital
Shareapplicationmoney(pendingallotment)
Reservesandsurplus
SecuredLoans
UnsecuredLoans
DeferredTaxLiabilities(Net)
Totalliabilitiesandequity
Applicationoffunds
Grossfixedassets(includingintangibleassets)
Less:depreciationandamortisation
NetFixedAssets
Capitalworkinprogress
Investment
Deferredtaxassets(Net)
Currentassets,loansandadvances
(a)Inventories
(b)SundryDebtors
(c)CashandBankBalances
(d)Othercurrentassets
(e)LoansandAdvances
Less:CurrentLiabilities&provisions
(a)CurrentLiabilities
(b)Provisions
NetCurrentAssets
Miscexpendituretotheextentnotwrittenoffor
adjusted
Profit&LossAccountDr.Balance
TotalAssets
FY10
0.185
0.000
0.023
0.013
0.000
0.000
0.221
0.000
0.220
0.066
0.153
0.000
0.000
0.000
0.000
0.000
0.239
0.007
0.000
0.021
0.000
0.201
0.000
0.068
0.000
FY09
0.185
0.000
0.017
0.018
0.000
0.000
0.220
0.000
0.201
0.038
0.163
0.000
0.000
0.000
0.000
0.000
0.209
0.027
0.000
0.010
0.000
0.189
0.000
0.056
0.001
FY08
0.019
0.000
0.006
0.028
0.076
0.000
0.128
0.000
0.111
0.009
0.102
0.000
0.000
0.000
0.000
0.000
0.069
0.005
0.000
0.003
0.000
0.052
0.000
0.026
0.001
FY10
0.0%
0.0%
37.5%
27.1%
0.7%
9.3%
75.8%
6.0%
14.6%
72.5%
121.2%
5.9%
20.6%
33.3%
FY09
900.0%
0.0%
206.5%
37.1%
71.2%
80.7%
299.9%
60.4%
202.7%
398.5%
202.8%
266.9%
115.7%
25.0%
0.000
0.221
0.000
0.220
0.000
0.128
0.7%
71.2%
Source:MCAfilings,CAPAresearch
RatioAnalysis
FY10
FY09
FY08
NetDebt/EquityRatio
CurrentRatio
QuickRatio
DebttoTotalAssetsRatio
2.7%
1.34
1.23
0.06
4.4%
1.30
1.24
0.08
412.5%
1.50
1.44
0.81
2014CAPAIndia
235
INDIA
AppendixP:Groundsupportequipmentwithselectdesignated
groundhandlingfirmsatIndianairports
elebiDelhiGroundHandlingDelhiAirport
GroundSupportEquipment
Quantity
AirStartUnit
AirConditioningUnit
AmbuLift
BaggageTrolley
ContainerDolly
Conveyor
ForkLift
GroundPowerUnit
Loader
PalletDolly
PushBack
Roller
StepLadder
ToiletCart
TowBar
TowTractor
Tractor
WaterCart
Total
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
n/a
xx
xx
xx
n/a
xx
xx
xxx
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