Tata Group to Set Up New Ground Handling & Aviation Academy for Air India

In addition to serving Air India's burgeoning in-house needs, Tata Sons plan 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.

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 is 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.

Why are These Changes Required?

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. The airline is undergoing a massive transformation. It is buying new aircraft, improving the quality of services and ensuring timely flights. As per the report, there was an issue with aircraft swapping that forced Air India to cancel a few flights even on Monday.

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

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.

Air India has also raised INR 14,000 crore from the State Bank of India (SBI) and Bank of Baroda (BoB) through a mix of refinancing of old loans and fresh loans. INR 1,500 crore has been obtained through the Emergency Credit Line Guarantee Scheme (ECLGS), and INR 12,500 crore through the refinancing of existing loans. The ECLGS was first introduced during the Covid-19 pandemic to help small businesses but was later expanded to other sectors.

(With Inputs from The Economic Times)

The Airports Authority of India (AAI) has achieved its highest ever capital expenditure (capex) in the fiscal year 2022-23, investing a total of Rs 5,175 crore to expand and enhance airport facilities, upgrade technology and improve operational efficiency.

In a tweet on Monday, April 10, the AAI said that AAI achieved the highest ever capex of 5175 cr. in FY 2022-23, for civil aviation infra development under the able guidance of HMCA @JM_Scindia (Jyotiraditya Scindia). This shows GoI’s commitment to modernizing and upgrading India’s airports!” 

It said that investments in developing Ranchi Airport,  Khajuraho Airport, Agartala Airport, Ayodhya Airport, Bhopal Airport and Chennai Airport had been made. This significant investment by AAI is expected to transform the Indian aviation industry, as it aims to enhance passenger experience and increase airport capacity.

“This #CAPEX is being utilized to enhance and expand airport facilities, upgrade technology, and improve operational efficiency, leading to the safer, more convenient and seamless travel experience for all at #AAIAirports,” it added. 

Aviation Minister on CAPEX

Recently, Mr. Scindia also noted that in the past 65 years, India had 74 airports. Within the last nine years itself, an additional 74 airports and heliports were built, doubling the number to 148. The Union Minister said that the ministry plans to build over 200 airports, waterdromes and heliports in the next four-five years, he added.

As the civil aviation sector expands in India, both in terms of passenger traffic and aircraft, capital expenditure of about INR 98,000 crore for the development and expansion of airports is in the pipeline, Minister for Civil Aviation Jyotiraditya Scindia said.

“India houses the third largest aviation market, and with that, we must also strive to be the best service providers. A lot is being done today, and much more will be done to brace for the future,” he said. The government-controlled Airports Authority of India is undertaking the development of new and existing airports with a projected capital expenditure of around INR 25,000 crore from 2019-20 to 2023-24. Major airports such as those located in metro cities and operated by private consortiums have also lined up capital expenditure for expansion.

What is Airport CAPEX?

Capital expenditure or capital expense (capex or CAPEX) is the money an organization or corporate entity spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land. It is considered a capital expenditure when the asset is newly purchased or when money is used towards extending the useful life of an existing asset, such as repairing the roof. CAPEX are vital expenses for the airport industry; they are the funds used by an airport operator to acquire, construct, or improve fixed assets such as land and buildings. These types of outlay are made by airports to maintain or increase the scope of their operations and are allocated for specific periods. These expenditures can include everything related to increasing airport capacity, ranging from additional check-in desks to building a new terminal building or runway.

Alliance Air, a former Air India subsidiary, is currently experiencing flight disruptions as a result of a pilot strike. The strike has been going on for many days and has led travellers to be inconvenienced by aircraft cancellations and delays. Alliance Air is a small airline that serves many locations in India. It was a subsidiary of Air India, India's national carrier, which has since been privatised. Alliance Air runs an ATR fleet and employs over 200 pilots and flies approximately 130 flights each day that serves smaller cities and towns throughout India. Since 1996, the airline has been offering a crucial service to travellers who need to travel to destinations that are not well-connected by larger airlines.

The Lockout

The Alliance Air pilot strike began on April 11, 2023, when pilots went on strike in order to seek better working conditions and greater compensation. The pilots claim that the airline has not provided them with enough rest and has overworked them. They also say that their salary is not competitive with the industry and are requesting a large raise. According to two sources, some 70 Alliance Air flights were impacted on Tuesday as a group of pilots maintained their strike for the second consecutive day, and the airline issued show cause warnings to the pilots. Roughly 70-80 pilots did not report for duty to protest, among other things, the non-restoration of salary to pre-COVID levels and the non-payment of allowances.

Travelers’ Experience

Passengers affected by aircraft cancellations and delays have suffered significantly as a result of the pilot strike. According to sources, over 70 flights have been cancelled and many more have been delayed since the strike began. Several passengers have been stuck at airports and have forced to make other travel plans. The situation has been especially tough for travellers who want immediate transportation and cannot afford to wait for the strike to conclude.

Conflicts in the Airline Industry

Employees in the aviation sector are no strangers to labor issues, frequently going on strike to seek better working conditions and remuneration. While strikes cause inconveniences and discomfort for travellers, they are a vital weapon for employees to use to voice their concerns and negotiate with management.

The Alliance Air response

Alliance Air has released a statement expressing apology for the disruption caused to passengers and stressing that the situation is being resolved. The airline has also stated that it is in negotiations with the striking pilots in order to obtain an agreement that is acceptable to all parties. Nevertheless, the airline has not yet issued a timetable for when the strike would finish, putting passengers in the dark. According to the source, the pilots' contracts are being renegotiated, but a portion of the pilots have gone on strike without notifying the airline. The striking pilots have been served with show cause notices and told to appear for duty within 24 hours. According to the source, normalization of flying operations would take some time. Alliance Air had no formal statement on Tuesday.

Conclusion

The Alliance Air pilot strike has caused major disruption to aircraft operations and discomfort to passengers across India. The pilots are requesting improved working conditions and more compensation, and the airline is now negotiating a solution with them. Nonetheless, travellers will continue to be affected by flight cancellations and delays until the strike ends, and it is unclear when the issue will be rectified.

The Yamuna Expressway Industrial Development Authority (YEIDA) has announced plans to provide a Malaysian institution with a 100-acre block of land for the development of an Education City near the planned Jewar Airport in Uttar Pradesh, India. The initiative intends to establish a world-class education centre that will attract foreign students while also boosting the region's economy. Lincoln University College and the YEIDA have signed a Memorandum of Understanding (MOU), according to YEIDA officials.

The Education City Initiative

The Education City project is a component of a wider proposal to transform the Jewar Airport region into a centre for education, business, and leisure. A variety of educational institutions, including schools, colleges, and universities, as well as research and development centres, incubation centres, and other infrastructure to support education and innovation, will be included in the project. Lincoln University College is to invest Rs 2,000 crore in the creation of Education City, which would include a super specialty hospital with 1,200 beds, a medical college, a university, and other amenities. The school, which will offer diploma and degree programs' in medical, aviation, aircraft repair, finance, and management, is expected to open in Sector 9, which is designated for institutional development. The Education City project is projected to have a large economic impact on the region by producing employment, attracting investment, and encouraging innovation. It would also give local students access to high-quality education, as well as possibilities for international students to study in India.

The advantages of the Education City initiative

The Education City initiative provides a number of advantages for both the region and the country as a whole. First and foremost, it will contribute to the improvement of educational quality in the region by giving access to world-class educational institutions and infrastructure. This will contribute to the creation of a highly trained workforce, which is critical for economic growth and development. Second, the initiative will bring international students to the region, which will stimulate cultural interchange and expand the student population's variety. This will assist students in developing a more global perspective, which is crucial for success in the current economy. Ultimately, the Education City initiative will provide jobs and stimulate regional economic growth. The initiative will attract investment and stimulate innovation, allowing entrepreneurs and businesses to thrive and prosper.

Progress

"The land will be allocated in the institutional sector, near the new Jewar International Airport." The move will result in an investment of around Rs 2,000 crore. "We will expedite the process and award the property to the interested party by the end of this month," said YEIDA CEO Arun Vir Singh. According to B. Abdul Rafeeq, executive director of the Lincoln University College India Chapter, “The full building work would be done in two to three years and the university in a year.” "We will begin construction work within two weeks after getting the YEIDA's land allocation notice." “We want to begin enrolling students in the upcoming school year. Students from India will no longer have to leave the nation to obtain an inexpensive, quality education, thanks to the establishment of an Education City by a foreign institution,” according to Rafeeq.

Conclusion

The decision to allocate a 100-acre block of land to a Malaysian institution for the development of an Education City near the Jewar Airport is a key step towards establishing Uttar Pradesh as a world-class education powerhouse. Through producing employment, attracting investment, and supporting innovation, the initiative is intended to have a substantial influence on the region's economy. The term "responsibility" refers to the act of determining whether or not a person is responsible for his or her own actions. Overall, the Education City project is a promising development with the ability to revolutionize the region and contribute positively to India's growth.

With inputs from MoneyControl