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Tata justifies aviation foray

Tony Fernandes (left) and Ratan Tata in Bangalore on Thursday. (AFP)

Mumbai, July 3: Ratan Tata, chairman emeritus of the Tata group, today defended the decision to enter both the low cost and the full-service air carrier businesses, saying a huge market in India exists in both these sectors.

Tata was attending the launch of the domestic operations of AirAsia India in Bangalore today. Malaysian carrier AirAsia holds 49 per cent in AirAsia India, while Tata Sons has a 30 per cent stake. Telestra, owned by Arun Bhatia, holds the rest of the stake.

The Tatas will also launch a full service carrier with Singapore Airlines and Arun Bhatia has reportedly expressed his reservations on this.

Tata said both the airlines would compete constructively, and would not cannibalise each other. He said there was place for both the airlines as the aviation industry in India had a huge untapped market.

AirAsia Group CEO Tony Fernandes, who was present at the event, said the aviation industry in the country was very small compared to the population and the potential of the tourism industry.

“For the size of the population and for the size of the potential tourist market, the aviation industry is very small. There is huge scope for a fourth airline. I would tell my competitors this is not about one, two or three airlines — all of us should work together in making it more affordable for Indians to fly, to help Indians to fly overseas for business and also to bring people to this wonderful country,” he said.

 
 
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