The Telegraph
Thursday , May 8 , 2014
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Long-held Tata dream gets licence to fly

New Delhi, May 7: The Tatas appear set to return to the Indian skies after more than 60 years with AirAsia India, the new carrier being partnered by the group, securing the flying licence today.

“We have granted the air operator’s permit (AOP or flying licence) to AirAsia India, subject to the final decision of the high court,” said Prabhat Kumar, who heads the directorate-general of civil aviation (DGCA).

The approval is subject to the decision of Delhi High Court where a petition by BJP leader Subramanian Swamy is pending against the venture. The matter is scheduled to come up for hearing on July 11.

AirAsia India is a three-way venture between Malaysia’s AirAsia, Tata Sons and another investor, Arun Bhatia of Telestra Tradeplace. The Tatas hold 30 per cent, AirAsia 49 per cent and Bhatia 21 per cent.

The venture is the first after foreign investment norms in aviation were liberalised last year allowing foreign airlines to invest in Indian carriers. “History has been made today in aviation. Everything has been hard for AirAsia but we never give up. Today AirAsia India has got APPROVAL,” AirAsia CEO Tony Fernandes tweeted.

According to AirAsia India CEO Mittu Chandilya, the airline is likely to start operations in “about two to three months”. “We would soon be filing our flight schedules for approval.”

The Tatas insisted, like they have done before, that they were only a financial investor. “It is very clear that AirAsia would be running the operations,” a Tata official said. The Tatas also own a 6 per cent stake in SpiceJet.

However, this will be the first time Tatas will be co-promoting an airline after their plans to float one in the mid-1990s were stymied by two successive governments that sat on their application. One of the proposals involved a tie-up with Singapore Airlines.

The Tatas and aviation go back a long way. JRD Tata was the founder of Air India and is considered the father of civil aviation in India. The government nationalised Air India in the 1950s.

The new airline will focus on connecting smaller towns and cities. Officials listed Calcutta, Trichy and Kochi among the planned destinations and said they were looking at a 10-plane fleet within the first year of operations.

However, legal niggles remain. BJP leader Swamy “condemned” the grant of the licence before the court hearing and alleged it was a violation of the election code that forbids big policy decisions.

The DGCA said the permit was given as the high court had not clamped a stay and the new airline’s application was filed much before the polls were announced.