— PHOTO: R. RAGU

BREAKING NEW GROUND: S. Ranganathan (left), Executive Director-Ground Services, and COO, AIATSL, exchanging documents with Karmjit Singh (right), COO, Singapore Airport Terminal Services Ltd, in the presence of V. Thulasidas (second from left), Chairman and Managing Director, Air India, and Ng Chin Hwee, President and CEO, SATS, in Chennai on Wednesday.

CHENNAI: Air-India (A-I) and Singapore Airport Terminal Services Ltd. (SATS) have floated a joint venture company to run ground-handling services at the upcoming international airport at Devanahalli, near Bangalore.

Air-India will hold 60 per cent equity in the venture and SATS the balance. The joint venture agreement was initialled here on Wednesday.

Addressing a press conference, V. Thulasidas, Chairman and Managing Director of A-I, said the consortium comprising the two had won a seven-year concession at the end of a tender exercise conducted by Bangalore International Airport Ltd. (BIAL). The airport is scheduled to go on stream in April 2008.

The CMD said the cost of the Bangalore airport ground services project would be around Rs. 70 crore. He said the joint venture would aim to garner around 55 per cent of the flight handling business at the airport. Eleven domestic carriers and 16 international airliners were operating 61,000 flights a year in Bangalore, he said. This number would go up significantly once the new airport went on stream, he added.

"This is the first joint venture with a foreign company to provide services in an Indian airport," Mr. Thulasidas said. In this context, he said A-I and SATS would initial an agreement to float one more joint venture to run similar services at the newly coming up international airport in Hyderabad. The Hyderabad project would involve a cost of around Rs. 80 crore, he said. For the Hyderabad project, a three-way joint venture between A-I, Indian Airlines and SATS would be formed. A-I and IA would together hold 51 per cent stake and the SATS the balance. The Hyderabad project would also be ready in April 2008. Mr. Thulasidas said the proposed joint venture was confident of securing 60 per cent of ground handling services in the Hyderabad project. Eight domestic and nine international carriers were operating 45,000 flights a year in Hyderabad, he said. A-I and SATS, it may be recalled, had landed a 15-year cargo handling concessions from BIAL last year.

Answering a range of questions, Mr. Thulasidas said both A-I and SATS were looking at extending this relationship to other airports as well. He also indicated the JV arrangement between the two could extend beyond the Indian shores.

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