Fourteen unions representing over 30,000 employees of the National Aviation Company Ltd have threatened to go on strike in Mumbai from Tuesday to oppose the government's decision to set up a ground-handling services joint venture with Singapore Airport Terminal Services (Sats).

The 50-50 joint venture is expected to come into force from January 1, 2009.

Air India's ground-handling services contribute Rs 800 crore (Rs 8 billion) annually towards the revenue. The airline has over 20,000 ground-handling employees who will be shifted to the new joint venture.

Unions say this is backdoor privatisation of the airline and would also mean a change in the service conditions from a government entity to a new one, raising the threat of job losses for employees who will be shifted to the joint venture.

The revenue share with Sats has not been made public by the airline and Air India did not talk numbers.

"With this joint venture, our revenues get shared with a company that is banking on our expertise and technology," said George Abraham, general secretary, Aviation Industry Employees' Guild.

"This is a move to privatise the airline slowly because after the ground-handling joint venture with Sats, another one is in the offing for the maintenance, repair and overhaul services," he added.

Abraham said the management has referred the matter to the labour commissioner and there have been talks between the management and unions.

"But the management says it is a government decision and they cannot do much about it," He added.

Under the government's new ground-handling policy, private carriers are not allowed to undertake their own services and have to depend on either Air India's joint venture or two other ground-handling companies contracted by the airport authorities.

The move has been opposed by big private carriers, like Jet Airways [Get Quote], which have been handling their own ground services for some years now. The private carriers fear a job loss of at least 8,000 employees owing to the government move.

As a result of the opposition, the government is planning to extend the date for implementing the ground-handling policy, which was to start from January 1, till a solution is found.

The opposition of the ground-handling joint venture of Air India, however, has added to the government's problems.

An Air India spokesperson said the management was aware of the unions' stand but the move to spin off the ground-handling business is for the good of the airline.

"To match the competitive environment of today you have to match with the best or you will not be able to compete with the best. And this is what the airline is trying to do by getting into a joint venture with Sats," said Jitendra Bhargava, executive director, (corporate communications), Air India.