Tata-Singapore Airlines moves a step closer to taking off

OUR BUREAU Mumbai/New Delhi | Updated on July 09, 2014

Tata-SIA Airlines has moved a step closer to taking to the skies with the Director General of Civil Aviation (DGCA) saying that there is no reason why the airline’s application for an Air Operator Permit (AOP) should not be considered.

In doing so, the aviation regulator has rejected the objections raised by domestic carriers and other entities, which are likely to be affected by Tata-SIA’s foray into the domestic aviation space.

Objections overruled

Disposing the six objections received from the public, the DGCA said that Tata-SIA is registered in India, with two-thirds of its directors being citizens of India. Moreover, substantial ownership and effective control of the joint venture is vested in the hands of Indian nationals, satisfying all conditions for the grant of an AOP, DGCA chief Prabhat Kumar said.

While the Tata Group owns 51 per cent, Singapore Airlines has a 49 per cent stake in the joint venture, which is to be based in New Delhi. On the issue of foreign shareholding, one Rohit Jain had raised an issue over the 18.5 per cent foreign shareholding in the Tata group, arguing that the effective shareholding of the Indian company becomes less than 51 per cent in the airline venture.

“As per the reply given by Tata-SIA, the information given by Jain is factually incorrect and 18.47 per cent of the paid up capital of Tata Sons is held by two Indian entities and only 0.03 per cent is held by foreign nationals,” Kumar said in the public notice.

Further, those who raised objections had said that that foreign airline can invest only in existing ones and not start-ups under the sector’s Foreign Direct Investment policy guidelines. The DGCA said that the issue was examined by the Foreign Investment Promotion Board at the time of allowing 49 per cent participation by SIA in the joint venture.

Final order

Despite the latest development, there is no clarity on when Tata-SIA will start flights. The AOP will also be considered subject to the final order of the Delhi High where a hearing is scheduled on July 11 on the subject of permitting FDI in greenfield airlines. Moreover, the carrier will have to get its flight and airport manuals and perform a route proving flight before it is allowed to start commercial operations. Tata-SIA had earlier indicated that it will start operations in the third quarter of the year.

Published on July 09, 2014

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