The union cabinet today approved the proposal of the National Aviation Company of India Limited (NACIL) for setting up of a joint venture company with Singapore Air Terminal Services (SATS) for undertaking ground handling / cargo handling activities at various airports in India.
NACIL and SATS would hold 50:50 equity in the joint venture company, a government press release said.
The JVC would be managed by the board of directors consisting of representatives from NACIL and SATS in equal proportion. The chairman of the board and CEO of the joint venture would alternate between NACIL and SATS for a fixed tenure.
All profits and losses of the business would be shared by NACIL and SATS in the ratio of the equity structure.
The joint venture would invest Rs99 crore and Rs 73 crore respectively for setting up cargo handling and ground handling facilities in Bangalore; Rs80 crore for ground handling facilities in Hyderabad.
The JV would also invest in ground handling and cargo handling facilities in metro airports .
National Aviation Company of India Limited (NACIL), formed by the merger of the erstwhile Air India and Indian Airlines, holds a major share of the ground handling business at airports in India.
With the introduction of independent world class handling agencies at the airports, there would be induction of modern equipment, technology and resource management tools leading to very high level of competition in the field. In order to succeed in retaining majority of the business, NACIL is required to take proactive measures to upgrade its services by induction of modern technology with special focus on customer services and quick response to customer needs, the release said.
While the ramp handling remains to be a strong point of NACIL, its customer service, passenger handling and cargo handling will get the required boost in quality, to face the competition effectively, the release pointed out.