SATS, AI ink JV agreement on ground, cargo handling | business | Hindustan Times
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SATS, AI ink JV agreement on ground, cargo handling

business Updated: Apr 17, 2010 16:17 IST

Air India and Singapore Airport Terminal Services (SATS) have signed an agreement to form a 50:50 joint venture company for their three existing ground and cargo handling JVs in Bangalore and Hyderabad.

The agreement, signed in Singapore yesterday, would be named Air India SATS Airport Services Private Limited (AISATS) and the JV company is in the process of being incorporated in Delhi soon, an Air India spokesperson said here.

The incorporation of AISATS, which is expected to be completed next month, would provide a legal entity to house the existing operations in Bangalore and Hyderabad and potential operations in other metro airports.

Air India and SATS will each nominate three representatives as Board members of AISATS, he said.

Government had on March 29 approved a specific JV firm, Air India SATS Airport Services Bangalore, to provide ground and cargo handling services at the Bangalore airport to enable the company issue shares to raise resources.

The Bangalore project estimated at about Rs 172 crore, comprises Rs 99 crore for cargo handling project at the new Bangalore airport and about Rs 73 crore for the ground handling venture.

In September 2008, Air India chose SATS as its JV partner for ground handling in India and both companies collaborated in Hyderabad and Bangalore under three separate JVs, providing ground and cargo handling services since the opening of the new airports at these two cities in 2008.

However, the incorporation of these JVs was held back, pending Air India's plans to select a strategic ground handling partner at other metro airports in India, like Delhi and Mumbai where world-class ground handling is required.

In a statement, AI CMD Arvind Jadhav said, "Combining our knowledge of the market and the strengths SATS has built from its over 60 years of experience, we are confident that this JV will gain superior capabilities and competitiveness".

SATS President and CEO Clement Woon said, "Our successful cooperation with Air India in Hyderabad and Bangalore has demonstrated the vast synergies that our partnership can potentially reap".

"We seek to deepen our participation in the privatisation of India's aviation sector and contribute to the growth of the industry", Woon added.

SATS has been providing comprehensive airport services encompassing air freight handling, passenger services, ramp handling, baggage handling, aviation security, aircraft interior cleaning.

It also provides food solutions like airline catering, food distribution and logistics, industrial catering, chilled and frozen food manufacturing as well as airline linen laundry.