A-I inks Rs 70 cr JV with Singapore Airport

Air-India (AI) signed a 60:40 joint venture agreement with Singapore Airport Terminal Services Ltd (SATS) in Chennai recently to provide ground handling services at the upcoming Bangalore International Airport.

This is the second agreement between A-I and SATS, the first being a JV agreement signed last year for providing cargo handling services at the Bangalore International Airport.

"In a few days, we will sign a 51:49 JV agreement with SATS for the provision of ground handling services at the Hyderabad airport also. While the estimates for the ground handling project in Bangalore will work out to around Rs 70 crore, the Hyderabad project size will be about Rs 80 crore," Vasudevan Thulasidas, chairman and managing director, A-I, said.

Both projects are expected to be operational by April 2008. "The JV for the Bangalore project plans to handle the majority of flights in Bangalore. We expect to get not less than 55 per cent of services provided to flights. We hope to provide 60 per cent of ground handling services to all flights at the Hyderabad airport," Thulasidas added.

Thulasidas also mentioned that they were seriously considering similar JVs for providing such services at the Mumbai and Delhi airports in the future. He also added A-I hoped to take these services to foreign airports in due course of time.

Talking about the acquisition of 68 more aircraft, he said six of them had been delivered and the rest would be delivered by 2011. The total investment in acquiring all aircraft, including related equipment is around Rs 35,000 crore.

On the AI-Indian merger, he mentioned that the legal formalities of the merger were expected to be completed by June 2007. But the complete integration of both entities would take about 18-24 months, he added.

A-I's total ground handling business is in the region of Rs 1,200-1,500 crore, of which over Rs 500 crore worth of services is contributed by other airlines.