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Currently, there are six scheduled domestic
airlines in the country -- Air India, Jet Airways,
Jet Lite, SpiceJet, IndiGo and GoAir.
IndiGo is the leading passenger carrier with
27.3 percent of market share as of November last
year, followed by Air India at 20.7 percent and
SpiceJet at 19.5 percent.
The operating licence of now defunct Kingfisher
Airlines has been suspended since last year.
On Mar 6, the Foreign Investment Promotion Board
(FIPB) gave its nod to the Malaysian budget carrier's
proposal to start a new airline joint venture
(JV) with partners, the Tata Group and Arun Bhatia-promoted
Telestra Tradeplace.
The good always win. People and companies with
good intentions to create jobs and make life of
the average man better will always win,"
tweeted an elated Tony Fernandes, Air Asia's Indian-origin
founder and chief executive.
"Thank you all. AirAsia - Tata India airline
proposal gets government nod."
In its proposal, the company had said that it
intended to hold 49 percent stake in the JV.
The Malaysian budget carrier intends to invest
anywhere between $30 million to $60 million in
the airline venture. While Tata Sons will hold
30 percent, Telestra Tradeplace will hold a 21
percent stake.
Incidentally, India's first carrier was Tata
Airlines, which took flight in 1932. In 1953,
it was nationalised and renamed Air India.
The Tatas had earlier tried to start an airline
with Singapore International Airlines in the mid-1990s,
but could not succeed.
The other partner, Arun Bhatia, runs an aviation
parts manufacturing firm, Hindustan Aerosystems,
from New Delhi.
When contacted a senior finance ministry official
told IANS: "The proposal has been accepted
under merit and policy."
Meanwhile, Civil Aviation Minister Ajit Singh
said he does not foresee any problem in the venture
as long as all regulatory requirements are fulfilled.
"I don't see any big hurdles. The aviation
ministry will check procedures of taking no objection
certificate, having two-thirds of India directors
and others were followed," Singh said at
an event organised here.
However, the minister said that the JV may face
some procedural problems that would require certain
clearances from FIPB.
Earlier, the civil aviation ministry had sought
a clarification from FIPB on the new foreign direct
investment policy in the domestic airline sector.
The ministry wanted to know whether the new rules
were exclusively for existing domestic airlines
or even for new start-ups.
Fernandes has tweeted that he has chosen an Indian
to lead the airline, as per law.
"I have selected our CEO (chief executive)
for Airasia India. Very smart boy from the south,
Madras. An amazing CV (curriculum vitae). Will
impress all," Fernandes said in a tweet.
According to the low-cost carrier (LCC), the
JV plans to operate from Chennai and will focus
on providing connectivity to smaller cities with
a small fleet initially. It plans to start operations
by the end of 2013.
AirAsia said it is confident of replicating in
India its successful business model which it delivers
in Malaysia, Thailand, Indonesia and other JVs.
AirAsia has a fleet of 118 aircraft and has ordered
350 planes to service its network. Currently,
AirAsia through its operations based in Thailand
and Malaysia operates in Chennai, Bangalore, Tiruchirappalli,
Kochi and Kolkata. It is investing anywhere between
$30 million to $60 million in its airline venture
in India.
(IANS)
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