CIAL-SATS tie-up raises eyebrows

THIRUVANANTHAPURAM: A move by Singapore Airport Terminal Services (SATS) to enter into a tie-up with Cochin International Airport Limited (CIAL) for ground handling services at the Nedumbassery international airport has raised many eyebrows. SATS already has a joint venture tie-up with Air India for AI-SATS which is carrying out ground handling at five Indian airports, including Thiruvananthapuram. In case SATS strikes a fresh deal with CIAL,  it  will have to take on Air India’s terminal services wing which is a ground handling agent at Nedumbassery airport at present.

A section of Air India employees has  pointed out this paradox to the higher-ups, including the civil aviation ministry, even as the talks between CIAL and SATS are progressing. While sources in the aviation sector said that SATS and CIAL had  already signed a memorandum of understanding in this regard, CIAL managing director V.J. Kurian said that talks were only progressing and that a final decision was yet to be taken. “The issue of SATS’s existing tie-up with Air India had come up during discussions and SATS maintained that it won’t be a legal hurdle. Anyway, final decisions would be taken only after looking into all such aspects,” he said.

There are allegations that there are undue pressures on the  government from various quarters to push the CIAL-SATS deal. While AI-SATS preferred to be silent on the matter, sources associated with the firm maintained that the existing joint-venture agreement on AI-SATS would have to be modified for enabling SATS to enter into a fresh tie-up with CIAL. The present joint venture agreement of AI-SATS restricts Air India and SATS from carrying out or participating in any business activity that conflicts with the business of the joint venture firm.