Mumbai, April 3: The Tatas’ joint venture with Singapore Airlines (SIA) has got the nod from the aviation ministry.
In a late evening development yesterday, the civil aviation ministry granted a no-objection certificate to the Tata-SIA joint venture, which will enable the company to approach the directorate general of civil aviation (DGCA) for securing an air operator’s permit.
While confirming the development, a Tata-SIA spokesperson said they were yet to receive an official communication from the ministry on the issue.
The joint venture has already reportedly received the mandatory security clearance for its three directors from the union home ministry, a major pre-requisite for getting an NoC from the aviation ministry.
Tata Sons will hold a 51 per cent stake in the proposed airline, while the rest will be with Singapore Airlines.
According to the MoU inked between Tata Sons and Singapore Airlines on September 19 last year, the board will initially comprise three directors. While two of them — Prasad Menon (chairman) and Mukund Rajan (Tata Group brand custodian and chief ethics officer) — will be nominated by the Tatas, Mak Swee Wah is the director nominated by SIA.
The joint venture received approval from the Foreign Investment Promotion Board last October. The board, which will be headed by Menon, will be subsequently expanded to include six directors. All these names have been sent to the home ministry for security clearance.
India is the only domestic market in the world to see a decline in air traffic demand this February compared with last year, even as global traffic continued to show “solid” growth in the same month.
India’s domestic air traffic fell 1.8 per cent in February over the same month in 2013, making it “the only domestic market to see a contraction in demand,” the International Air Transport Association (IATA) said on the latest global air traffic figures.
Subdued consumer sentiment ahead of the upcoming elections as well as elevated fare levels may have contributed to the dip in demand.