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Air India's proposed sale may hit ground-handler Sats

SINGAPORE Changi Airport's biggest ground-handling firm Sats may be impacted by the proposed sale of India's national carrier Air India since Sats owns half of Air India Sats (Aisats), a joint venture between Sats and Air India.

The plan is to sell Air India as a package, along with its ground-handling arm Aisats and budget carrier Air India Express.

Aisats currently operates in the five Indian airports of Bangalore, New Delhi, Hyderabad, Mangalore and Thiruvananthapuram. The future of Aisats has come under scrutiny in the wake of an Indian government announcement that it will permit foreign firms to own up to 49 per cent of Air India.

While foreign airlines could previously own up to 49 per cent of other Indian airlines, the government had, until now, prohibited such an investment in Air India, Singapore Strait Timesreported.

When asked whether Sats is concerned about the developments and possible sale, a spokesman told The Straits Times: "There is no reason why a sale of Air India would affect our stake or influence in Aisats."

While Sats believes there will be no direct impact on its Aisats operations, analysts cautioned that the situation could change in the coming months if Air India is sold.

The Singapore firm would have to work with a new co-owner who may or may not be aligned with its plans and visions for Aisats, they said.

Aviation analyst Shukor Yusof at Endau Analytics said: "It would be in Sats' interest to see Air India rehabilitated because it's a profitable business."

India's Minister of State for Civil Aviation Jayant Sinha said earlier this month that the Indian government expects to divest its stake in Air India - though it may retain a minority share - by the end of the year.

He told Indian business news website Moneycontrol that so far, only Interglobe Aviation, which runs Indian carrier IndiGo Airlines, has officially expressed its intent to buy the national carrier.