The pioneer of aviation business in the country are back with a bang as Tata Sons on Thursday announced it has tied up with Singapore Airlines to set up a full service carrier in India to help stimulate demand for air travel.
The new airline will be based in New Delhi and Tata Sons will own 51 per cent, while Singapore Airlines will own 49 per cent in the proposed joint venture. The airline, however, is subject to FIPB and other regulatory approvals. The Chairman will be Prasad Menon, nominated by Tata Sons. “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 in the statement.
“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,” Singapore Airlines CEO Goh Choon“Tata Sons is one of the most established and respected names in India. With the recent liberalization, the time is right to jointly bring consumers a fresh new option for full-service air travel. We are confident the joint venture airline will help to stimulate market demand and provide economic benefits to India,” Phong added.
Details of the airline’s branding, management team and products and services will be announced in due course. When contacted by The Pioneer, a Tata Sons spokesperson said that Tatas want to be in the airline business for the long term as they see huge untapped potential in the market.
“Based on CAPA data for 2012, the number of domestic airline seats per capita is very low at just 0.07 in India against those of 3.35 for Australia, 2.49 for the USA, 1.38 for Canada and 1.05 for Japan,” the spokesperson added. Tata Group has already announced a partnership in February with Malaysia’s Air Asia for a budget airline in India and this is the third attempt by Tata’s and Singapore Airlines to enter the Indian civil aviation sector.
They had applied to FIPB for a full service airline in 1995, which was cleared a year later but the airline never saw light due to a change in the civil aviation policy in 1997 that barred foreign carriers from holding stake in domestic airlines. Tatas and Singapore Airlines had jointly bid for the 40 per cent divestment of Air India in 2000 but withdrew from it in December 2001. The disinvestment of Air India did not take palce due to political opposition.