Tata Airline proposal deferred again

However, suspense over the fate of the airline proposal is far from over as the civil aviation ministry is yet to send its comments on the proposal to the FIPB.

Besides the Tata Airlines proposal, the board was also likely to take up Toyota Motor Corporation’s application for setting up an industrial park in Karnataka, to house the component manufacturing units for vehicles manufactured from its joint venture company Toyota Kirloskar Motors Private Ltd. The proposal ofBanque Nationale de Paris for setting up a non-banking finance company in India was also on the agenda. The Tata proposal has been deferred twice on the request of the civil aviation ministry which sought more time for giving a formal approval to the proposal.

The civil aviation ministry had come under intense political pressure to seek another deferment of the proposal. However, the Prime Minister’s Office had shown interest in clearing the project in order to send out the right signals to the private sector. The ministry had, in the past, asked for time to examine whether the proposal abided by the new aviation policy announced on June 12 this year. The policy forbids equity participation by foreign airlines directly or indirectly in any domestic airline. While the Tatas have clarified that Singapore Airlines, the venture partner, will have no equity stake in the company, they have sought permission for technical collaboration with the airline.