Tata to establish ground-handling business under Air India: Report

Tata to establish ground-handling business under Air India

In addition to serving Air India's burgeoning in-house needs, Tata Sons plans to offer shared ground-handling services to other airlines. Air India Air Transport Services (AIASL), the former state-run carrier's ground-handling operation, may also be up for auction as part of these plans. As part of the sale of Air India, the government hived off its business units to a holding company called Air India Assets Holding, according to a report by the Economic Times.

Moneycontrol could not independently verify this news development.

A revamp of Air India's organization may include establishing an aviation training academy within the proposed entity. Air India wants its academy to be the largest and best in the world. According to officials, Tata Sons has set aside significant funds for the aviation business for the next five years to fund the proposed venture, the report added.

"That is the way forward discussed within the top management. Airport services and ground handling are also a critical consumer-facing role adding to the overall consumer experience in addition to the one inside the aircraft," said an official aware of the discussions. The plans are expected to fructify once Air India comfortably progresses on its recent ambitious aircraft-purchasing plans, officials said, as quoted by ET.

"This is another ambitious plan that will take a big focus once the initial set of critical Air India operational needs are taken care of," he said. The training academy and ground-handling services are parts of Air India's ambitious plans to be a top global airline. Going ahead, Air India will require several home-grown pilots, engineers, cabin crew, airport managers and other function specialists, the report added.

After state control ended in January 2022, Tata took to transforming the airline into the best in class in terms of fleet, technology, organization, and services.

Recent ground-handling issues had cropped up, however, and the Tatas will now seek to strengthen this area as well, top officials said, as quoted by the report.

Tata Sons did not comment, and neither did executives at Air India.

Boosting Air India's ground-handling services are critical as the aviation-to-automobile conglomerate aims to build a global aviation powerhouse. Despite the Tata takeover, problems with old aircraft and technology glitches persist, preventing the carrier from reaching its full potential. There was an issue with aircraft swapping that forced Air India to cancel a few flights even on Monday, as per the report.

AI SATS is a joint venture between Air India and Singapore-based SATS Airport Services that provides airport services.

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In the future, the airline plans to expand this venture. Sanjay Gupta, the CEO of the JV, said in February that the JV plans to establish a multimodal cargo hub at Greater Noida airport. A cargo terminal (ICT), as well as an integrated warehousing and logistics zone, will be included in the facility. Additionally, the government will shortly invite bids for the airline's engineering unit and its former ground-handling subsidiary AI Airport Services, the report added.