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Govt clears full-service Tata SIA Airlines for take-off

The Government on Thursday gave the green signal to Singapore Airlines’ (SIA) proposal to start an aviation venture with Tata Sons entailing an initial foreign investment of $49 million.

‘It (the Tata-SIA proposal) has been cleared,’ Economic Affairs Secretary Arvind Mayaram told reporters after a meeting of the Foreign Investment Promotion Board (FIPB) here. Mayaram said that no riders have been set for the joint venture.

In their new venture, Tata SIA Airlines Ltd, Tata Sons would hold 51 per cent stake and Singapore Airlines (SIA) 49 per cent. The venture secured the approval of the Corporate Affairs Ministry last week.

With the clearance of the FIPB, decks are cleared for Tata SIA to launch operations as a full-service air carrier in India.

The FIPB, headed by Economic Affairs Secretary Arvind Mayaram, is an inter-ministerial panel for approving foreign direct investment (FDI) across sectors.

The two partners are making an initial investment of $100 million to launch the airline, which may take off next year after getting all the required clearances.

Tatas and Singapore Airlines have assured the government that control of their proposed venture would always remain in Indian hands, while seeking approval to offer full-service passenger airways on both domestic and international routes.

This is the third attempt by Tatas and SIA to enter the Indian civil aviation sector.
 
Tatas have a long history of association with civil aviation in India. JRD Tata had started Tata Airlines in 1932, which was later in 1946 renamed as Air India and was subsequently nationalised in 1953.

The joint venture would also provide air transport carriers for both passengers and freights as well as supporting services to air transport, like operation or airport flying facilities, radio beacons, flying control centres and radar stations.

In February this year the Tatas also announced a partnership with Malaysia’s AirAsia for a low-cost carrier in India, wherein Arun Bhatia’s Telestra Tradeplace is the third partner. FIPB had approved this venture in April 2013.

According to the latest data, during the April-July period, foreign direct investment inflows grew by 20 per cent to $7.05 billion, from $5.90 billion in the same period last fiscal.
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