The Little Untold Story of the Concessionaires at IGI Airport

Are our airports, working on the Public-Private-Partnership (PPP) model, really still PUBLIC (to a lesser or greater extent), or are these gradually and unnoticeably slipping into a Private-Private-Partnership (still a PPP!) model?

Issue: 12 / 2019By Air Vice Marshal S.S. Chauhan (Retd)
By Air Vice Marshal S.S. Chauhan (Retd)
President, Business Aircraft Operators Association (BAOA)

 

In the general period 2014 to 2016, DIAL actively floated and pursued international tenders for establishing world-standard MRO facilities at IGI Airport. The older self-established MRO facilities of the small charter operators were to be shut down to make space for the new entities. Each of these new entities were to consist of at least one Indian MRO and one similar international player to jointly constitute one such ‘Concessionnaire’. For fair competition, minimum three such concessionaires were to be so planted at the airport. The projected intention, as given out in various DIAL presentations, was to bring in expertise and establish international standard MRO facilities for charter aircraft at Delhi Airport, by infusing substantial infrastructural funds and by upgradation of skill levels of local aviation technicians to be in tune with international norms.

The small charter operators doing self-maintenance and handling found it well outside their financial capacity to tie-up with international players and make a bid. Finally, only two entities viz ‘Bird-Execujet’ and ‘Indamer-M.Jets’ were declared successful bidders and bestowed the status of the ‘Concessionaires’ permitted to carry out MRO, handling and miscellaneous associated business at the airport. Any small entity, with its own DGCA-approved CAR-145 approval, that tried to enforce it’s right as earlier to carry out MRO and self-handling on its small charter aircraft, was somewhat arm-twisted indirectly by unusual steps such as, illustratively, denial of renewal of entry passes for its vehicles, of driving permits for its drivers and by default alloting aircraft parking spaces farthest from their allotted hangar space, making maintenance and handling operations on such aircraft most difficult! The non-plussed small operators saw the writing on the wall. Some, left with no choice, fell squarely into the lap of these concessionaires, while others as refugees quit Delhi as their age-old maintenance base to go to other nearby airports such as Jaipur, Hissar, Aligarh, Bhiwani and some other feasible locations. While continuing to operate from Delhi as the natural passenger and business hub, this, for all charter operators, did result in increased costs, mainly on account of aircraft ferries to and fro, associated pilot and technical personnel boarding/lodging/travel costs, and at times, with ‘no-go’ situations, such as when aircraft could not be ferried out due to indicated defects requiring rectification before next flight, being haplessly forced into the lap of the same very two Delhi-based concessionaires, who are now the only ones with access to MRO hangar space at the airport, with ad hoc terms and conditions for utilisation of public hangar spaces and associated facilities by others.

Even thereafter, further tightening of the noose started. Both the monthly MRO charges as well as the aircraft handling charges were progressively increased in an ad hoc manner through one-sided contracts in which the smaller sides, hapless as before, have had no say or choice except to submit and sign on the dotted line. As was highlighted in an earlier BizAvIndia issue, the handling charges were increased this FY (April onwards!) by, illustratively, an astonishing 77 per cent for a small 8-seater turboprop aircraft and by 56 per cent for a 6-seater business jet. The sense of proportions has been apparently lost sight of, with no quick-fix remedial measures or relief available to the small operators saddled with increasing costs and progressively tighter, shoestring operating budgets.

The icing on the soured cake has been that the international partners have apparently taken no steps to bring up the technical skills of the local technicians to international standards as was the original intention on which the foundation of the concessionaires was laid. Also, planting of only two concessionaires, instead of minimum three for a fair competition, was totally lost sight of! Handling charges have to be ‘input costs plus reasonable profit based’, however, surprisingly as on date these abnormally increased rates of handling being charged by both the concessionaires are the same, leading to a strong suspicion amongst the charter operators that ‘Cartelisation’ has taken place between the two concessionaires, as with their widely different infrastructures, the input costs for both can never be the same.

This, in essence, is the untold and unsavoury little story of the establishment of the two ‘Concessionaires’ imposed in the recent past on the small, hapless charter operators at the IGI (Delhi) Airport.

Are our airports, working on the Public-Private-Partnership (PPP) model, really still PUBLIC (to a lesser or greater extent), or are these gradually and unnoticeably slipping into a Private-Private-Partnership (still a PPP!) model?


The Little Untold Story is by now fast developing at some other national airports as well on similar lines!
Is Any Body Listening?