NEW DELHI: Tata Sons ÃƒÂ¢Ã¢â€šÂ¬Ã¢â‚¬Â the founders of Air India ÃƒÂ¢Ã¢â€šÂ¬Ã¢â‚¬Â are back in aviation with a bang. The group on Thursday announced it has tied up with Singapore Airlines to launch a new full-service airline in India which will initially fly on domestic routes and then head overseas too.
This new joint venture comes on the heels of Tata's partnership with Malaysian low cost carrier AirAsia under which they will launch a budget airline here possibly before the year-end.
"Tata Sons and Singapore Airlines have signed a memorandum of understanding (MoU) and applied for Foreign Investment Promotion Board (FIPB) approval to establish a new airline in India that will help further stimulate demand for air travel.... the airline will be based in New Delhi and will operate under the full-service model. Tata Sons will own 51% and Singapore Airlines will own 49%," according to a statement jointly issued.
This is the second time in just over a decade that Tatas and Singapore Airlines have got together for an aviation business venture in India. In 2001, they had jointly bid to acquire a 40% stake in Air India, when the then government had tried to part-privatize the loss-making national carrier. However, the privatization plan for Air India did not take off due to opposition from political parties and other important players in Indian aviation and the two then parted ways.
"The initial board will have three members, two nominated by Tata Sons and one nominated by Singapore Airlines. 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," said Prasad Menon, chairman of the joint venture.
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. Tata Sons is one of the most established and respected names in India. With the recent liberalisation, 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."
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