Air India’s ground-handling JV with SATS gets stuck

According to Air India executives,SATS has been insisting that the joint venture be signed with its newly-formed subsidiary firm,SATS Investment Private Limited. NACIL,on its part is reluctant to sign the JV with a SATS subsidiary that has been capitalised with just $2 and set up barely a month ago. “This violates the entire tendering process since SATS was selected based on its experience and its own financials,” a top executive told The Indian Express.

“The government had approved a JV between NACIL and SATS and not with the latter’s subsidiary,” the executives said. Last year,NACIL had received bids from 21 companies and had short-listed 13. In fact,a bid by Punj Lloyd and Swissport International through their subsidiary was rejected on grounds that the subsidiary did not have the requisite experience.

When contacted,a civil aviation ministry official said there was nothing untoward in NACIL setting up

the JV with the SATS subsidiary. In fact,one of the reasons why former Air India CMD Raghu Menon was eased out was his opposition to NACIL’s joint venture with the SATS subsidiary (as opposed to SATS itself) for ground handling.

Executives in NACIL said SATS representatives will be in the country next week to push for the JV with SATS Investment. NACIL CMD Arvind Jadhav could not be contacted.

Meanwhile,the Committee of Secretaries set up to resolve issues related to the ground handling policy,is of the view that the Cabinet Committee on Security delay implementation of the policy by three months,during which time issues related to infrastructure and passenger inconvenience are put in place. Till then,airlines be allowed to do self-handling at least in the terminal building at airports.