On 29 April, the Finance Ministry announced that the Alternative Mechanism empowered by the Cabinet Committee on Economic Affairs, which includes the Ministers of Roads and Highways and Civil Aviation, has approved the (highest) bid of Star9 Mobility Pvt Ltd in the sale. The government holds 51% stake in Pawan Hans Limited (PHL). Government-owned ONGC holds the remaining 49% stake in Pawan Hans, which provides helicopter and aero mobility services. It had earlier decided to give its entire stake to the successful bidder identified in the strategic disinvestment transaction of the government at the same price and terms as the government.
This is the second successful privatization in the domestic civil aviation sector in the last six months after Air India was sold to Tata in October last year. A three-way consortium of Star9 Mobility, Big Charter Pvt Ltd, Maharaja Aviation Pvt Ltd and Almas Global Opportunity Fund SPC, emerged as the highest bidder 211.14 crore, which was above the reserve price.
The government has been lucky for the third time since the first approval for disinvestment of PHL in October 2016. It may take time to sell, but the privatization of PHL is good news for more than one reason as it is bound to encourage the increased use of helicopters. Country. India’s fleet of about 250 civil helicopters accounts for about 1% of the total global helicopter power. Compare India’s 250 with the Brazilian city of Sao Paulo, which alone has 750 helicopters. Therefore, for its new owners, PHL offers tremendous potential for expansion of the helicopter business in India, as it has India’s largest fleet of commercial helicopters which is over 40.
The disinvestment of PHL comes in the backdrop of the government announcing a new helicopter policy last October, under which dedicated hubs and corridors are to be set up and landings are made, and parking charges are to be abolished to further boost helicopter operations. will be done. In addition, earlier this year the government announced that it was working on a policy to promote regional airlines and helicopter operators to improve last mile connectivity.
Moreover, in PHL, Star9 Mobility Pvt Ltd also gets a ready set of scalable business deals as the state-owned helicopter operator had long-term contracts to provide its services to various state governments as well as ONGC. The new owners can also see new business opportunities such as expanding religious tourism, providing medical evacuation and air ambulance, agricultural and civic amenity services, spraying crops and energy lines, in addition to providing intracity transportation to large cities such as metropolises and Inspection is included. The airport is far from the city center. The market for such services is ready to be tapped. PHL is well positioned for the first mover advantage.
Then there is the massive election-campaign market which PHL has traditionally served as the preferred mode of transport for VVIPs opting for helicopters during campaigning. Unlike a commercial aircraft that can only land at airports, helicopters require only a solid patch to land, allowing politicians to cover as many constituencies as possible in a day of campaigning.
With Star9 Mobility Private Limited one of the three members of the consortium that owns the regional airline that operates commercial aircraft, the new owners can also look at the opportunity to connect passengers from one corner of the country to another. Flybig is set to start commercial flights using Canadian Q400 aircraft connecting Delhi to Shillong from May 2. This opens up the possibility for a passenger from Meghalaya to fly to Delhi on Flybig, visit Rajasthan using a privatized PHL helicopter and then return to Shillong on a Flybig flight.
Another major advantage to new owners by purchasing PHL is that it also has around 600 trained manpower including pilots and aircraft maintenance engineers. Roughly half are associated with PHL on a contract basis.
However, before the new owners can actually start reaping the benefits of their new acquisition, they will have to invest in equipment, spare parts and renegotiate existing contracts as these are negotiated if PHL is a public sector undertaking. was done. This will involve money and time. PHL last inducted helicopters around 2010. The market may not be too eager to pay for a ride on helicopters older than five years. Also, with the helicopter company going into private hands, it is more than likely that the state governments would like to renegotiate the deals they had earlier closed with the public sector enterprise.