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Tata: Eye on the sky
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New Delhi, March 1: Ratan Tata, chairman emeritus of the $100-billion Tata Group, today met civil aviation minister Ajit Singh to discuss the group’s proposal of an airline with Malaysia-based AirAsia.
Civil aviation ministry officials neither confirmed nor denied the news, though some sources said the meeting went on for almost an hour.
A few days back, AirAsia said it planned to take 49 per cent in the proposed joint venture with Tata Sons Limited, the holding company of the conglomerate.
The joint venture will have a third partner, Arun Bhatia of Telestra Tradeplace Private, an investment holding company, the airline told the stock exchange in Kuala Lumpur. Bhatia’s son Amit is Lakshmi Mittal’s son-in-law. Amit Bhatia and Air Asia’s chief Tony Fernandes are also co-owners of British football team Queens Park Rangers.
This is the second time the Tatas are starting an airline after JRD Tata’s initial venture, Tata Airlines, founded in the 1930s, was nationalised in 1948 and turned into Air India. The Tatas had tried to set up an airline in the 1990s in collaboration with Singapore Airlines but eventually gave up complaining of changing and unclear rules. A book by former civil aviation secretary M.K. Kaw had claimed that lobbying by a rival airline on FDI rules stymied efforts to set up the Tata-SIA airline.
AirAsia’s CEO Tony Fernandes had earlier said the new airline might take to the sky by the end of this year with four Airbus A-320s and his company would make an initial investment of between $30 million and $50 million.
An application has already been moved by AirAsia’s investment arm, AirAsia Investment Limited (AAIL), before the Foreign Investment Promotion Board (FIPB) to seek approval for acquiring a 49 per cent equity in the airline company. Of the remaining stake, Tata Sons is likely to pick up 30 per cent and one of Bhatia’s companies, Hindustan Aerosystems, 21 per cent.
After the FIPB approval, the joint venture company will apply to aviation regulator Directorate General of Civil Aviation for a flying permit. The FIPB is likely to take up AirAsia’s application for the joint venture on March 6.
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