Cabinet approves AAI-CAE aviation academy JV; IGRUI, CAE management contract

New Delhi: As long-term measures to meet the shortage of pilots, the Cabinet today gave its approval for management contract agreement of the Indira Gandhi Rashtriya Uran Akademy (IGRUA) with CAE Inc., Canada. The management contract agreement will now be signed at the earliest. This will enable the taking over of management of IGRUA by CAE Inc. Canada for better management of the Academy in a more professional manner in order to produce 100 pilots per year
The Government has also approved the formation of the subsidiary company of the Airports Authority of India (AAI) for establishing a flying and aviation training institute at Gondia in Maharashtra as a joint venture enterprise with CAE Inc. Canada. The company will now be registered very soon. This company will establish a flying and training institute, which will help in meeting the growing requirements of pilots and technical manpower relating to the aviation industry.
As per the management contract of IGURUA proposed by the Ministry of Civil Aviation:

• The management contract partner will assume the responsibility of the management of IGRUA’s flying training activities in totality including maintenance of aircraft, flying operations, ATC, runway maintenance etc. The initial capacity of the Akademy would be increased from the 40 cadets to 100 cadets per year within an agreed time frame, which may further increase to 200 pilots.
• The Chief Executive Officer/Director would be appointed by CAE who will be supervised by a Steering Group in which Governing Council of IGRUA and CAE would be equally represented.
• Current employees of the IGRUA will be maintained on the basis of existing service conditions.
• The management contract will include a restructuring of the flight training, aircraft maintenance and the training programme.
• The management contract will have a performance based management philosophy with clear accountabilities and targets to measure performance.
• The revenue model of management contract would be worked out with the objective of making IGRUA a self-sustaining organization over the next three to four years not requiring any Government support.
• The flying training institution under IGRUA would currently be affiliated to CAE, Global Academy in order to derive the maximum leverage out of the global recognition of the CAE brand name. This position would be appropriately reviewed once IGURUA is developed into a full-fledged Air University covering all branches of aviation and allied activities.

To further augment the availability of pilots in the country, the AAI has proposed setting up of a JV Company – the National Flying Training Institute (NFTI) at Gondia in Maharashtra, for imparting world class flying training. The Institute is to be named as Rajiv Gandhi National Flying Training Institute. The objective of this company would be:

• To establish world-class facilities and infrastructure for providing flying training for commercial pilot license.
• To plan aeronautical facilities conforming to ICAO norms, and non-aeronautical facilities for the institute.
• To management and maintain the flying training institute for training of aircraft and helicopter pilots to hold and organize such other training prorammes relevant to Civil Aviation, science of aeronautics and connected operations, as considered appropriate by the company from time to time.

The company would be a JV Enterprise, initially incorporated as a subsidiary company of AAI, which will later form a JV Company with an organization having experience in the field of aviation training at the international level. The equity-sharing ratio between the AAI and the JV partner will be 49:51 thereby implying that the management control of the institution will vest with the JV Partner. The debt equity ratio will be 40:60.
The estimated cost of the development of the National Flying Training Institute(NFTI) is Rs. 113.48 crores. The Institutional complex would cost approximately Rs. 41.5 crores and Aircraft, Helicopters and Training Aids 70 crores. The entire expenditure on this account is to be met by the JV by way of equity and debt and no Government funding is envisaged in the project. CAE Inc. in Canada has been selected as the Joint Venture Partner for establishing NFTI Gondia with the approval of the AAI Board. A non-binding MoU has been signed by AAI with CAE on 19th June 2007 for the establishment of NFTI.
08/11/07 Press Information Bureau (press release)