Collateral Damage: Celebi Airport Services India Future Hangs in Balance

The future of Turkish company Celebi Aviation Holding which operates through five subsidiaries at nine Indian airports (providing ground handling and cargo services) remains uncertain in India. The company is battling court cases in Delhi, Mumbai and Chennai, seeking the reversal of the May 15 decision of the Bureau of Civil Aviation Security (BCAS) revoking its security clearance, after it was found that Turkey had overtly supported Pakistan in the recent India-Pakistan conflict. 

Post that revelation, there has been a massive backlash for anything to do with Turkey. Amid the public outcry, the BCAS stopped all ground handling and cargo activities of Celebi at the nine airports (Delhi, Mumbai, Bengaluru, Chennai, Hyderabad, Kannur, Goa, Ahmedabad and Cochin). So far there have been no reports of any delays, disruptions or any other incident of ground handling / cargo operations at any of the airports as reportedly the other ground handlers have stepped in. 

As of May 29, the Delhi High Court has reserved its judgment; the Bombay High Court has directed the authorities not to go ahead with the tender for a new contractor till it resumed hearing after vacation in June; and the Madras High Court is hearing Celebi’s plea. It remains to be seen how the Courts will arrive at a judgement when the government is arguing that the revoking of security clearance has been done in the ‘interests of national security’, while the battery of lawyers representing Celebi are arguing that the government has gone against ‘natural justice’ and that it had nearly 4,000 employees to protect. The lawyers have been arguing that Celebi has a good track record, since its presence in India for the past 17 years and that it is majority-owned  by institutional investors from Canada, the United States, the United Kingdom, Singapore, the United Arab Emirates, and Western Europe. Actera Partners II L.P., a Jersey-registered fund holds 50% ownership in Çelebi Havacılık Holding A.Ş. The remaining 15% is held by Alpha Airport Services BV, a Dutch-registered entity.

‘In a class by itself’

The Solicitor General Tushar Mehta has argued that the government’s ‘plenary superintendence powers’ (granted to a body in absolute terms, with no review of or limitations upon the exercise of that power) apply to national and airport security. He called the case a ‘sui generis’ (in a class by itself) situation, for careful judicial review due to potential threats across multiple airports. 

Even while the court cases are going on, we have news that a Turkish firm Gulermak working on Kanpur metro has fled the country without paying Rs. 80 crores due to sub-contractors. Totally unrelated, this incident is likely to be brought up in the courts to indicate the risks involved, even as Celebi insists that it is ‘truly an Indian enterprise’ led and managed by Indian professionals and is ‘not a Turkish organisation by any standard’. 

State of Flux

The situation in the nine airports is in a state of flux. However, the airports and airlines that were working with Celebi have turned to the other ground handlers – AI Airport Services, Air India SATS Airport Services, the Bird group, and Indo Thai Aviation Services. 

3 ground handlers at major airports mandatory

As per AAI, airports handling over 10 million passengers annually must have a minimum of three ground handlers. The ground handling situation at airports is indeed challenging as India is experiencing substantial passenger and cargo growth. 

The Indira Gandhi International Airport in New Delhi 2024 handled about 78 million passengers and over one million metric tons of freight. It has only two – Bird Group and Air India SATS following the ‘suspension’ of Celebi. 

The Chatrapati Shivaji Maharaj International Airport (CSMIA) in Mumbai registered 6.3 per cent growth in passenger traffic in 2024 at 54.8 million passengers. It has roped in Indo Thai Airport Management Services, besides the existing ones AIASL and BWFS. At Kempegowda International Airport, Bengaluru; Chennai Airport and at Rajiv Gandhi International Airport, Hyderabad, the operations are handled by AISATS and BWFS, including that of Celebi. At Cochin Airport, ground handling has been handed over to AIASL and BWFS. In Goa, Celebi was the sole ground handler and now it has gone to BWFS. 

To ensure that there is no disruption in ground handling services the airports and airlines have gotten into ‘makeshift redistribution arrangements’. Presently, the Celebi employees have been ‘onboarded’ by the other players, while awaiting the final orders from the Courts. The Turkish company has invested over $220 million in infrastructure in India and all that is now at stake. 

The Courts indeed have an onerous task of passing judgment considering that the Solicitor General is stressing on national security with arguments like “The enemy can try 10 times and succeed once, country has to succeed all the time.” The Delhi High Court in its observation had said “The rule is better safe than sorry.”