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After Air Asia,Tata ties up with Singapore Airlines to set up new airline in India

Tata Sons will hold 51% in the planned airline while the rest will be with Singapore Airlines.

Written by ENS Economic Bureau | New Delhi | Published: September 19, 2013 4:41:43 pm

After waiting in the wings for two decades,Tata Sons and Singapore International Airlines have revived their proposal to launch an airline .

They will initially invest a combined $100 million to start the full-service carrier which will be based in New Delhi,with Tata Sons owning 51 per cent and SIA the rest.

This is the second airline joint venture announced this year by the Tatas,and comes after outgoing chairman Ratan Tata said in December he would “hesitate” to enter the aviation sector on account of “unhealthy competition”.

The group had in February announced the launch of a low-cost airline with Malaysia’s AirAsia.

Tata Sons and SIA said Thursday they had signed an MoU and applied for FIPB approval to start a new airline.

The plan for a full-service carrier in a predominantly low-cost aviation market is being seen as risky by many.

However,Mukund Rajan,the Tata nominee on the new airline’s board,said they are entering the market with a long-term view. “The demand for full-service airlines will grow in the long run,” Rajan told The Indian Express.

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