Tata-Sia Air­lines Likely to Fly from May-June 2014

Business Sphere - - Contents - Nishikant Dwivedi

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.

Tata-Air Asia

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

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