Celebi Aviation bets on foreign carriers' expansion to grow its India ops; mulls $80 million investment

Murali Ramachandran President India & Southeast Asia Celebi Aviation

Celebi Aviation Holdings, a ground handling and cargo operations provider, is eyeing the entry and expansion of foreign airlines in India and is in talks with carriers like Lufthansa, American Airlines, and Lion Air to grow its operations in the country.

"Today we do almost 75 percent of our business with foreign carriers and 25 percent of the business with Indian players," Murali Ramachandran, President India & Southeast Asia, Celebi Aviation, told Moneycontrol.

He said that due to geopolitical disruptions the entry and expansion of American and European carriers into the Indian market has slowed down, especially due to airspace restrictions to fly over Russia, Ukraine and some Middle Eastern countries.

"We had a signed contract with American Airlines to handle their ground handling operations at Bengaluru airport, but due to the war those plans were put on hold," Ramachandran said.

He expects many international carriers to start or expand both passenger and freight operations in India in the next couple of years, with the likes of Lion Air, Lufthansa, Cathay Pacific and American Airlines likely to increase their presence in India, a key market for Celebi.

Domestic airline tie-ups

Celebi is in talks with the Air India group for future contracts and currently provides ground handling services for the international flight portion of Air India's operations at the Mumbai airport and also handles SpiceJet and FLY91's ground handling operations at the nine airports its currently serves in India.

He added that before the merger of Air Asia India and Vistara with Air India, Celebi used to provide ground handling services to Air Asia India, but following the merger Celebi has lost out on some of contracts.

Domestically Celebi is not planning to start offering services at smaller airports in the country and would rather focus on larger and mid-sized airports. Ramachandran added that Celebi is eyeing opportunities at airports like the Chaudhary Charan Singh International Airport in Lucknow, Biju Patnaik International Airport in Bhubaneswar and Lokpriya Gopinath Bordoloi International Airport in Guwahati.

Ramachandran also said that for growth of the third-party ground handling services market in the domestic aviation sector in India, the central government will have to move forward with the divestment of AI Airport Services Ltd and ensure that domestic airlines are not allowed to carry out ground handling for other airlines.

He said that Celebi is keeping a close watch on the divestment of AI Airport Services Ltd by the government.

"AI Airport Services has the advantage of being present in all domestic airports and legacy agreements with Air India, which present a challenge for newer players looking to expand and take a pie of the domestic market. While the situation is improving with airlines coming out with tenders for ground handling services, any reversal of government policy would be detrimental for private players," Ramachandran said..

Investment plans

The company is mulling to invest around $80 million in India till 2027 and currently covers 65 percent of Indian aviation traffic through its presence in nine airports including Delhi, Mumbai, Chennai, Bengaluru, Hyderabad, Cochin, Ahmedabad, Mopa and Kannur.

"Celebi has already invested around $250 million (since its entry into the Indian market in 2007). In terms of expected investment, we will be adding $28 million in ground handling in the next four years. Around $30 million are likely to be invested in cargo business,” Ramachandran said.

Ramachandran added that Celebi is keen on expanding its TaxiBot services to Indian domestic carriers to help airlines improve fuel efficiency during taxiing. He said in some cases TaxiBot can also be used to reduce taxiing time in heavy fog conditions.

TaxiBot, a semi-robotic equipment, is used to tow an aircraft from the airport terminal gate to the taxi-out point without utilising the aircraft's engine and also in the taxi-in phase where an aircraft is towed to the terminal gate after landing.

TaxiBot was introduced in India in 2019 at the Delhi airport by the company in partnership with KSU Aviation. Currently, Celebi provides TaxiBot services at Delhi and Bengaluru airports and also plans to launch it at the Chennai airport.

Ramachandran said the company is eyeing ground handling business at the upcoming Jewar airport in Noida and Navi Mumbai airport while it is also keen to participate in the tender process for a similar business at the Kolkata airport.