Jet Air out of Mumbai airport deal

The bidding for the Rs 700-crore ground-handling contract is in its last stages.

Jet Air, owned by Jet Airways-promoter Naresh Goyal, is one of the two bidders to be disqualified from the ground-handling contract for Mumbai International Airport Limited (MIAL).

Industry sources said US-based Evergreen Aviation, which had tied up with InterGlobe, was also disqualified on the grounds that it owns low-cost carrier IndiGo.

The bidding process for the Rs 700-crore contract is in its last stages and the winner is supposed to be announced by the end of next month.

Seven national and international companies had submitted expressions of interest (EoIs) for the contract. These included Swiss Port International of Spain, Menzies Bobba, which does ground-handling at Hyderabad airport, and Turkey-based Celebi.

On September 1, MIAL selected four companies out of the seven for sending requests for proposals (RFPs), the next stage in the bidding process. Jet Air was one of the three companies to be disqualified. Singapore Airport Terminal Services Ltd had also applied. However, the company has a tie-up for ground-handling with Air India, which is already allowed to undertake this work and so was not required to bid at all.

According to sources, Jet Air had tied up with ASIG, a UK-based ground-handling company. “The EoI clearly said that no company having any connection with an Indian carrier would be allowed to bid for the contract. A US company called Evergreen Aviation had applied. But it tied up with InterGlobe later. Hence they had to be disqualified on the ground that InterGlobe owns low-cost carrier IndiGo,” said a source close to the development. InterGlobe executives were unavailable for comment. A Jet Air executive declined comment.

According to the ground-handling policy, which comes into effect from January 2009, only three entities are allowed to do ground-handling for airlines. These include airport operators like DIAL or MIAL; a joint venture company or subsidiary companies of national carrier Air India or companies formed through joint ventures; or a ground-handling agent selected through competitive bidding.

Airlines have been up in arms against the policy saying their ground-handling costs will almost double as a result of outsourcing the work to an agent rather than doing it themselves.