Murali Ramachandran, India CEO, Celebi Aviation, talks about his company’s expansion plans, scopes and challenges in India.
With the Indian aviation sector witnessing rapid growth, professional ground handling has become one of the major services that is being looked at by the airlines in India. Murali Ramachandran, India CEO, Celebi Aviation—one of the world’s largest ground handling companies, spoke to The Sunday Guardian about the scope, challenges and expansion plans of the company in India. Excerpts:
Q: Çelebi has completed a decade in India. How has the journey been so far given the growing Indian aviation sector?
A: Our journey has been very exciting and eventful. Pre-empting the massive growth prospects in one of the fastest growing aviation markets of the world, we entered India in 2008, winning the ground handling licence at the Mumbai International Airport. This was followed by a win at the Indira Gandhi International Airport, New Delhi, for both ground handling as well as cargo warehousing concession.
Çelebi has reached the apex position in this sector in these 10 years and expanded its ground handling services to key gateway airports, including Kochi, Bengaluru, Ahmedabad, Kannur and Hyderabad. Our aim is to continue to expand our footprint across major airports of the country, offering best-in-class technology and customer experience that we have acquired through our 60 years of global experience.
Q: How does Çelebi look at the India aviation market, given that the Indian aviation sector is one of the fastest growing in the world?
A: The Indian aviation sector has been witnessing unparalleled growth in the last few years. With the increased demand for air transport driving expansion in the airport infrastructure and commercial airlines, the ground handling industry is expected to witness significant growth as well. The ecosystem needs qualified ground handlers like us to support and keep pace with this exponential growth potential in this country by bringing in best practices and world-class service quality.
Ground handling companies like ours would be required to expand their service offerings to accommodate the additional flight movements and increased passenger, baggage and cargo capacity. Also, with the implementation of the new ground handling policy, we predict a gradual rise in the number of certified ground handling companies in India, leading to the formalisation of the industry.
Q: What are the benefits of a ground handling company over the existing contractor system prevalent in Indian airports?
A: Ground handling is a capital-intensive business and requires a highly trained and skilled workforce due to the sensitive nature of this business. Ground handlers bring in a one-stop service proposition to the airlines and implements best practices from service and safety perspective which is very critical to reduce cost exposures in this sector. This also allows airlines to focus on their core business of flying.
With the new policy in place at most gateway airports, the use of contract manpower has substantially reduced. Unfortunately, due to various reasons, the policy is yet to be implemented at many airports. At such airports, the domestic airlines continue to use outsourced manpower companies. Apart from being cost averse, this is also a model of concern from the safety, security and service quality perspective.
For companies like Çelebi, this is our core business and we invest a lot of resources, time and money in developing and improving this business. The manpower contractors are not invested into this business in any manner and are happy just letting out people which is a disservice to the sector and the airlines and the discerning passengers deserve better in the growing and maturing market.
Q: What are the challenges faced by the ground handling sector in India?
A: A major challenge faced by the industry is the lack of interest of the domestic airlines in outsourcing ground handling services to certified service providers. This is resulting in the shortage of trained staff on the ground. This also inhibits companies like Çelebi to present a strong business case in their favour.
Additionally, the sudden rise in the air traffic coupled with increasing demands and expectations of passengers from their travel experience is posing serious challenges like apron congestion, pressure to provide automated terminals, hassle-free security check-ins, along with efficient passenger and luggage management transportation systems. These challenges are making the ground handlers continuously re-structure their business models and adapt to the requirements of the changing market.
Q: Do you see smaller airlines outsourcing ground handling to companies such as yours?
A: The ground handling policy in India prohibits airlines from using outsourced manpower taken from non-bonafied and non-certified contractors. The airlines have been given a choice to either self-handle by employing employees on their rolls or engage with certified firms like ours. Some of the domestic airlines in India choose to self-handle their flights. We expect domestic airlines to realise the cost benefits and other value propositions/benefits of outsourcing ground handling services to certified players like Çelebi. As on date, some major players do outsource
their handling to handlers like us.
Q: The full scale implementation of the Ground Handling Policy is being delayed, How does it affect the growth in the sector?
A: As mentioned earlier, we are hopeful that the domestic airlines in India will gradually understand the need to partner with certified ground handling players. The implementation of the policy will make it mandatory for the airlines to either partner with ground handling companies or expose themselves to high levels of investment and large workforce requirements. Scattered and inefficient ground handling operations at the airport are the reason why airports are unable to better manage the utility of the premium spaces within the airport premises.
Q: What are your future expansion plans for India?
A: Our aim is to continue to develop high quality competitive ground handling and cargo operations across the markets we operate in. We have devoted huge efforts to earn a unique and matchless position of creating economic value for all stakeholders in the aviation sector. Çelebi has made an investment of more than $200 million in India. However, we have not bound ourselves to making only financial investments in the country.
Our plan is to help formalise the sector in the country that will, in turn, add efficiency to the entire flight operation in the country. Çelebi aims to finalise its pan-India expansion by 2021. We strongly believe that the next phase of growth in the aviation market will come from South Asia, primarily India. Besides, the new Civil Aviation Policy will accelerate capitalisation of these prospects.
Currently, Çelebi mostly handles international flights in India. We wish to have a strong presence in the domestic airlines market as well and are in negotiation with some airlines for the same.