Air-India has received inquiries from Singapore Airlines, Lufthansa, Swissport and Cambata Aviation Ltd for partnerships in its proposed ground handling subsidiary.

Top Air-India sources told Business Standard that Singapore Airport Terminal Services Ltd, a subsidiary of Singapore Airlines, and GlobeGround India, the ground handling division of Lufthansa, have evinced interest in the new venture.

Swissport, an erstwhile subsidiary of SwissAir, is one of the world's largest ground handling companies with operations in 60 cities, while Cambata is India's largest private ground handling agency.

"The talks are at a preliminary stage and the companies are waiting for us to draw up detailed proposals for the venture," an Air-India official said. Air-India had already created a subsidiary with an authorised capital of Rs 100 crore (Rs 1 billion) and a paid-up capital of Rs 10 crore (Rs 100 million), he added.

According to industry sources, Singapore Airport Terminal Services is also in preliminary discussions with Indian Airlines regarding its ground handling subsidiary.

Singapore Airport Terminal Services is already present in India as Taj-SATS, which is a joint venture with Tata's Taj Group for air catering services.

The hectic activity in the Rs 1,000 crore (Rs 10 billion) ground handling industry comes after the decision by the government to allow only subsidiaries of Air-India, Indian Airlines and the Airports Authority of India to do ground handling at domestic and international airports.

The decision to disallow ground handling by private agencies and self-handling by airlines was taken due to security issues.

The decision is to allow up to 49 per cent private participation in the three subsidiaries. Air-India, Indian Airlines and the Airports Authority of India will be entitled to 10 per cent of the total revenue generated by the companies. All the three organisations have already formed their subsidiaries.

At present, two private domestic airlines do their own ground handling, while Air-India provides services to 34 airlines. Cambata does ground handling for 16 international airlines, including British Airways and Gulf Air.

Partnership issues

• The government has disallowed ground handling by private agencies due to security reasons.
• Only subsidiaries of A-I, IA and the AAI are allowed to do ground handling at domestic and international airports.
• Govt has decided to allow up to 49 per cent private participation in the three subsidiaries.
• AI, IA and the AAI will be entitled to 10 per cent of the total revenue generated by the companies.