The civil aviation ministry is likely to seek clarity on whether the chief of the Indian operations of AirAsia would be an Indian citizen.
Two government officials confirmed that AirAsias proposal,submitted to the ministry on April 23,does not mention anything about the CEO of the Indian operations. If the CEO is a foreigner,the airline will have to apply for security clearance from the home ministry. Before processing the request any further,we need to know this, an official involved in the process said. Another official said the ministry would write to the airline to clarify the matter. The objection is similar to concerns in the telecom sector where the rules permit only Indian CEOs.
The ministry has raised the objection despite Jet Airways,SpiceJet and GoAir all having foreign origin CEOs. An AirAsia spokesperson said they had not received any communication from the ministry on the matter. AirAsia CEO Tony Fernandes has tweeted that the CEO will be a person from South India,very smart boy from the South,Madras. The ministrys objection is the latest in a line of issues that have dogged the investment plan of AirAsia India to set up a low-cost airline,a three-way venture between Malaysia-based AirAsia,Tata Sons and Arun Bhatia of Telstra Tradeplace.
AirAsias proposal was hotly debated in the Foreign Investment Promotion Board as the aviation ministry felt that the relaxation in FDI rules of the sector did not envisage a foreign firm-led startup.