Having received the green signal from the Foreign Investment Promotion Board (FIPB) for Singapore Airlines (SIA) to set up a full service airline in India in partnership with the Tata Group, Tata-SIA Airlines is all set to launch by May-June 2014. This was informed by Prasad Menon, Chairman, Tata SIA Airlines after a meeting of Ratan Tata, Chairman Emeritus, Tata Group; Goh Choon Phong, CEO, SIA; with Anand Sharma, Commerce and Industry Minister, Govt of India; and Ajit Singh, Civil Aviation Minister, Govt of India, to seek fast clearances for the ambitious project. The proposal has to receive a formal approval from the finance ministry and thereafter it apply to the aviation ministry for a no-objection certificate and then DGCA for a flying permit.
Singh said that the entry of Tata-SIA Airlines would benefit the Indian aviation sector as SIA isan established and one of the best airlines in the world. Replying to a question over the number of clearances by different ministries, Singh said, “I don’t see any problems. The Director General of Civil Aviation (DGCA) will have to be satisfied. There are issues relating to fleet, parking space, slots and routes. It depends on how fast Tata-SIA gives all the data and documents,’’ he added.
Tata Sons will be a majority partner in the venture with 51 per cent stake, while Singapore Airlines will hold 49 per cent. The two companies plan to set up the airline with an initial investment of US$100 million, where the Tatas will pump in US$51 million, while SIA will invest US$49 million. The venture got the green signal from the Corporate Affairs Ministry and the Commerce Ministry also approved the shareholding agreement. Asked about what kind of aircraft the new airline would consider flying, Goh and Menon said no fleet plan has yet been drawn up as they are still working on it.
“It is Tata Sons’ evaluation that civil aviation in India offers sustainable growth potential. We now have the opportunity to launch a world-class, full-service airline in India. We are delighted that we are partnering in this endeavour with the world-renowned Singapore Airlines,” Menon said.
Meanwhile, TATA is also looking at Air India. Ratan Tata has already evinced interest in the possibility of privatisation of Air India. “As and when it happens, we would be very happy to look at it,” Tata said when asked whether he would be interested if Air India was privatised.
TATA Group is looking at aviation sector in a big way. Prior to forming JV with SIA, Tata has formed a JV with AirAsia to launch AirAsia India. AirAsia India is likely to commence flying by January. This is a third attempt by the Tatas and SIA to enter the Indian civil aviation sector. The Tatas have had a long association with civil aviation in the country when JRD Tata started Tata Airlines in 1932, which was later renamed as Air India and was subsequently nationalised in 1953.
