The Supreme Court will on Monday examine the government's defence to justify its policy of keeping out private airlines from ground handling duty, which is to be handed over to a consortium led by Air India or to the airport managing companies.
The apex court on April 4 had sought a response from the government whether such a move would not hurt the efficiency of private airlines.
The ministry of civil aviation, Directorate General of Civil Aviation and other government bodies are opposing the petition filed by Federation of Indian Airlines (FIA), an umbrella body of private carriers, challenging the policy.
The apex court had refused to stay the judgement of the Delhi High Court, which on March 4 asked private carriers to follow the directions of civil aviation regulator DGCA to enter into agreement with the firms approved by it for ground handling duties.
A bench of justices R V Raveendran and A K Patnaik admitted the petition filed by Federation of Indian Airlines (FIA) and issued notices to the Ministry of Civil Aviation and DGCA.
The government, on account of security reasons, had permitted only national carrier Air India and the airport operator (such as Airports Authority of India, GMR and GVK) to render ground handling services.
The change in policy assumes significance as the size of the ground handling business is estimated to be around Rs 1,500 to Rs 2,000 crore.
As per the policy, airports in Delhi, Mumbai, Kolkata, Chennai, Hyderabad and Bangalore are to implement the ground handling policy.
The FIA, which represents all Indian carriers, has stated that nearly 3,000-3,500 employees presently deployed by private airlines across the country would be displaced.
The airlines have already made heavy investments in ground handling, by employing staff and equipment, to meet the growing network.
The additional cost incurred by airlines to tie up with the new ground handlers, including Air India and its joint ventures, airport operators or the company selected through the bidding process, would be ultimately passed on to air passengers.
This is an additional burden on the airlines apart from the high jet fuel prices which have been volatile for the last two months.
The FIA maintains that several requests to the state governments to reduce sales tax on jet fuel have not had any effect.
The airlines also fear that their on-time performance could take a hit as a competing airline company, selected for ground handling, could deliberately delay loading and unloading of baggage and handling of passengers.
Delhi and Mumbai airports, which are always congested during peak hours, could witness further delays.
Currently, all private carriers -- Jet Airways (India), IndiGo, Kingfisher Airlines, SpiceJet and GoAir, together account for 84.3% market share. These airlines jointly have a fleet of nearly 200 aircraft.