Tata-Sia Airlines Likely to Fly from May-June 2014
Tatas and Singapore Airlines are likely to launch their full service carrier Tata SIA Airlines Ltd in May-June next year. The Foreign Investment Promotion Board (FIPB) has given its green ahead to the 51:49 joint venture entailing an initial investment of USD 100 million. The joint venture, however would require certain other clearances, including from the Directorate General of Civil Aviation (DGCA). After the FIPB clearance to the joint venture on October 24, Tata group Chairman Emeritus Ratan Tata and Singapore Airlines (SIA) chief Goh Choon Phong met Finance Minister P Chidambaram and Civil Aviation Minister Ajit Singh. “We are looking at very fast clearances. We hope that we will be able to launch by May-June,” Tata SIA Airlines Chairman Prasad Menon said after Tata and Goh met Ajit Singh. Maintaining that the entry of TataSIA Airlines would benefit the Indian aviation sector, the Civil Aviation Minister said SIA was globally known for its expertise in technical and managerial matters and was one of the best airlines in the world. By when the Civil Aviation Ministry would give the necessary clearances to the new carrier, Singh said, “I don’t see any problems. DGCA will have to be satisfied. There are issues relating to fleet, parking space, slots and routes. It depends on how fast they (TataSIA) provide all those data and documents.” Ratan Tata complimented the minister for “opening up the aviation sector in a really global manner” and added that Tata Sons’ airline venture with SIA was “a great opportunity” towards that end. He said, “The new airline will provide premium (fullfrill) service”. In the joint venture, SIA would be investing USD 49 billion and remaining of the USD 100 million would come from the Tatas. The new airlines will have its headquarters at Delhi.
Tata-SIA Airlines, is Tatas’ second venture in the aviation sector after its tie-up with Malaysian carrier Air Asia in February for a low-cost passenger air service in the country. When asked what kind of aircraft would the proposed airline consider flying, SIA CEO Goh and Tata SIA Airlines Chairman Prasad Menon, said no fleet plan had yet been drawn up. “We are working on it,” said Goh. When asked if they would start the airline with a few aircraft from the SIA fleet like AirAsia India was planning to do, Goh said, “We will consider it (operating flights with SIA planes till new fleet is inducted). That is a possible option.” While seeking approval to offer full-
service passenger airways on both domestic and international routes, Tata Sons and SIA have assured the government that control of their proposed venture would always remain in Indian hands. Of the six directors, four would be nominated by the Tatas. Aviation industry analysts have welcomed the decision, saying it would send very positive signals to the global investor community.
Tata’s interest in State Carrier Air India
Chairman Emeritus Ratan Tata said Tata Group would be interested in Air India if it was privatised. This comes amid reports that the government is inclined to give up control in the state carrier. “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. Ajit Singh recently said it was his personal opinion that the government should not be in service sectors like airlines or hotels and any future regime could consider privatisation of Air India, as the government would not give any more funds to the airline after it completed equity infusion of Rs 30,000 crore till 2021. Air India was formed as a division of Tata Sons Ltd (now Tata Group). It was being run as Tata Airlines till 1946, after which it became a public limited company.
In March, the Foreign Investment Promotion Board headed by Economic Affairs Secretary in the Finance Ministry has also given its nod to Malaysian budget carrier AirAsia’s bid to launch an airline in India by joining hands with Tata Sons. AirAsia has announced it would set up a 49:30:21 joint venture with the Tata Sons and Telestra Tradeplace of Indian investor Arun Bhatia to launch a new Indian airline. AirAsia is looking to start flying with 3-4 planes and would be headquartered in Chennai. It would focus on providing domestic connectivity to Tier-II and Tier-III cities. This airline would not fly on international routes any time soon as the current rules only allow those airlines to do so which have completed five years of domestic operations and have a minimum fleet of five aircraft.
Tata group Chairman Emeritus Ratan Tata
Singapore Airlines (SIA) chief Goh Choon Phong
Tata SIA Airlines Chairman Prasad Menon
Civil Aviation Minister Ajit Singh