Tata, Singapore Airlines join hands again for a new carrier
PTI New Delhi, September 19, 2013
First Published: 16:35 IST(19/9/2013) | Last Updated: 19:39 IST(19/9/2013)
Eighteen years after its failed attempt, Tata group on Thursday joined hands again with Singapore Airlines to start a new full-service airline in India.
Tata Sons, the holding company of most of the operating firms of the over $100-billion salt-to-software conglomerate Tata group, signed an MoU with Singapore Airlines under which it will own 51% stake in the proposed carrier.
The rest will be with Singapore Airlines.
The group, which had in February announced a partnership with Malaysia's Air Asia for a low-cost carrier in India, said it had applied for approval from the Foreign Investment Promotion Board (FIPB) to establish the new airline, which will be based in New Delhi.
The initial board of the new carrier will have three members, two nominated by Tata Sons and one by Singapore Airlines.
The chairman will be Prasad Menon, nominated by Tata Sons.
This is the third attempt by the two partners to enter the Indian civil aviation sector.
In 1995, they had applied to the FIPB for a full service airline, which was cleared a year later, but the venture never took off due to a change in the civil aviation policy in 1997 that barred foreign carriers from holding stake in domestic airlines.
The deal did not come through and years later former chairman Ratan Tata had famously remarked that the deal failed because the group refused to bribe a Union minister.
The government last year changed policy to allow up to 49% foreign investment in domestic airlines.
In 2000, Tatas and Singapore Airlines had jointly bid for the 40% divestment of Air India but withdrew from it in December 2001.
The disinvestment of Air India did not take place due to political opposition.
Commenting on the fresh development, Menon said, “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.”
Expressing similar views, Singapore Airlines CEO, Goh Choon Phong said: “We have always been a strong believer in the growth potential of India's aviation sector and are excited about the opportunity to partner Tata Sons in contributing to the future expansion of the market.”
With the recent liberalisation, the time is right to jointly bring consumers a fresh new option for full service air travel, he added.
Unlike in its tripartite partnership with AirAsia and Arun Bhatia's Telestra Tradeplace Pvt Ltd for Air Asia India, in which Tata Sons holds 30% stake but no operating role, in the new proposed full service carrier it will be in driver's seat.
Details of the airline's branding, management team and products and services will be announced in due course, the company said.
The Tatas have a long history of association with civil aviation in India.
In 1932 JRD Tata had started Tata Airlines. It was renamed in 1946 as Air India, which was nationalised 1953.
Tata Sons, the holding company of most of the operating firms of the over $100-billion salt-to-software conglomerate Tata group, signed an MoU with Singapore Airlines under which it will own 51% stake in the proposed carrier.
The rest will be with Singapore Airlines.
The group, which had in February announced a partnership with Malaysia's Air Asia for a low-cost carrier in India, said it had applied for approval from the Foreign Investment Promotion Board (FIPB) to establish the new airline, which will be based in New Delhi.
The initial board of the new carrier will have three members, two nominated by Tata Sons and one by Singapore Airlines.
The chairman will be Prasad Menon, nominated by Tata Sons.
This is the third attempt by the two partners to enter the Indian civil aviation sector.
In 1995, they had applied to the FIPB for a full service airline, which was cleared a year later, but the venture never took off due to a change in the civil aviation policy in 1997 that barred foreign carriers from holding stake in domestic airlines.
The deal did not come through and years later former chairman Ratan Tata had famously remarked that the deal failed because the group refused to bribe a Union minister.
The government last year changed policy to allow up to 49% foreign investment in domestic airlines.
In 2000, Tatas and Singapore Airlines had jointly bid for the 40% divestment of Air India but withdrew from it in December 2001.
The disinvestment of Air India did not take place due to political opposition.
Commenting on the fresh development, Menon said, “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.”
Expressing similar views, Singapore Airlines CEO, Goh Choon Phong said: “We have always been a strong believer in the growth potential of India's aviation sector and are excited about the opportunity to partner Tata Sons in contributing to the future expansion of the market.”
With the recent liberalisation, the time is right to jointly bring consumers a fresh new option for full service air travel, he added.
Unlike in its tripartite partnership with AirAsia and Arun Bhatia's Telestra Tradeplace Pvt Ltd for Air Asia India, in which Tata Sons holds 30% stake but no operating role, in the new proposed full service carrier it will be in driver's seat.
Details of the airline's branding, management team and products and services will be announced in due course, the company said.
The Tatas have a long history of association with civil aviation in India.
In 1932 JRD Tata had started Tata Airlines. It was renamed in 1946 as Air India, which was nationalised 1953.
No comments:
Post a Comment