FIPB clears Tata - SIA proposal

After two failed attempts over a decade back, Tata Sons and Singapore Airlines (SIA) will finally be together in the cockpit of a start-up airline in India by early next year. The foreign investment promotion board (FIPB) has cleared their $100-million initial investment proposal for a full service airline, in which Tatas will have 51% and SIA 49%. The proposal was submitted on September 19.
Economic affairs secretary Arvind Mayaram said the JV has been cleared with no riders. The airline will now need security clearance for its foreign directors, followed by a clearance from the aviation ministry, and then a scheduled operator permit from the Directorate General of Civil Aviation (DGCA). Flyers can now expect to be spoilt for choice once again as the Delhi-based full service “Tata SIA Airlines Ltd” could fly in a few months, soon after Tata’s budget carrier with AirAsia takes off.
“All this process (at DGCA and security clearances) can take anywhere between one to four months. It all depends on how fast they complete the paperwork,” aviation minister Ajit Singh said.
The Tatas’ start-up JVs with AirAsia and SIA may also be eligible to have international flights soon after launch. Singh said the existing rule that an Indian carrier must be five years old and have at least 20 planes in its fleet to go overseas will be abolished. “There is no reason to subject Indian carriers to such a discriminatory provision. There is anyway a rule that a scheduled carrier must have five aircraft in its fleet within a year of launch. That will remain and there may be no need for any number
of years in service clause. I have asked DGCA to come up with suggestions,” the minister said.
Sources say UPA-II is keen that the proposed airline takes off in its remaining tenure. Tata-AirAsia applied for FIPB nod this February and the DGCA’s scheduled operator permit could be issued by December. The airline may fly in January or February, which means within a year of applying. While this is fast by Indian government standards, the Tata-SIA files are likely to move even quicker.

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