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AAI to hive off air navigation services, appoints consultant

The move, experts said, will help unlock the potential to upgrade air traffic control systems in India’s fast-growing aviation market.

New Delhi |
March 9, 2015 1:38:17 am

By: Sharmistha Mukherjee

In a step towards listing profitable public-sector undertaking Airports Authority of India (AAI) on the bourses, the government has appointed former law secretary NK Chaturvedi as a consultant to recommend measures to hive off air navigation services (ANS) from the state-owned airport operator.

Chaturvedi has been mandated to firm up modalities to spin off air traffic control services from AAI, prior to it being listed on the bourses.

The move, sector experts said, will help unlock the potential to upgrade air traffic control systems in a fast-growing aviation market where safety standards lag behind global benchmarks. The proposed ANS Corporation will control route navigation facilities, terminal navigation and instrument landing systems autonomously, allowing AAI to focus on its core function of managing airports.

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“If ANS is hived off as a separate entity, there will be recognition that it is a different area of service which is highly technology intensive and requires different competencies,” said an aviation expert who did not wish to be identified. Besides, separation of airport operator and air navigation service provider (CNS/ATM) would also help the government in avoiding any conflict of interest situation which is in line with ICAO recommendations.

A senior official in the ministry of civil aviation said, “At a time when government is mooting privatising airports where AAI will also be a stakeholder, not hiving off ANS may cause legal issues and conflicts of interest.” Air traffic services in markets like the US and Europe are also kept out of the ambit of airport operations.

The issue of separating Air Traffic Control (ATC) services from airport operators had been pending before the government for a long time. Various committees starting from 1976 had recommended this, the latest being the Naresh Chandra Committee of 2004. In November last year, civil aviation minister Ashok Gajapati Raju Pusapati too had announced plans to corporatize AAI and list it on the stock exchange — a move which was designed to take off only after hiving off ANS. He had declined to specify a time line for the same. However, civil aviation secretary V Somasundaram had indicated that it could take up to six months.

AAI officials say the authority will remain profitable even after ANS is hived off as the latter contributes 25-30 per cent of its total revenue. “We have been profitable and hiving off ATC will not make much difference,” said an official.

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