 "AirAsia set for takeoff")
Earlier on Friday, DGCA disposed of all objections and said AirAsia India would shortly be given an air operators’ permit (AOP) on completion of formalities. The decision also got a fillip from the Supreme Court, which refused to pass any interim order to restrain the Centre from giving a final approval to the Tata-AirAsia deal. The court, however, held that any decision taken by the government on the deal would be subject to the outcome of the case pending in the Delhi High Court.
“We have not issued the AOP as AirAsia has yet to complete the formalities. But we have disposed of all objections. The airline’s application for AOP has been held valid and the permit will be issued as soon as all procedural requirements are met,” said a senior DGCA official.
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FIA Associate Director Ujjwal Dey wrote in a letter: “The Supreme Court has directed any action taken by the Government of India in the interim (till the HC passes an order) would be subject to final orders passed by the court… We hope, given the observations and directions of the Supreme Court, the government/DGCA will not take any action, including grant of any permission or further approval to AirAsia India or any other similarly-placed airline, so as to precipitate the matter any further before the final decision of the high court on merits.”
The objections against the proposed low-cost carrier had been raised by other Indian airlines, besides Bharatiya Janata Party leader Subramanian Swamy, who is opposing foreign direct investment (FDI) in a start-up venture.
The DGCA official added: “The government has already clarified FDI in airlines will be permitted in greenfield ventures. Given that, it was not within out jurisdiction to decide on the issue again.”
With the final hurdle removed, AirAsia is expected to take to skies within the tenure of the current government at the Centre.
A few hours after the decision, AirAsia chief Tony Fernandes, who was in Mumbai, tweeted: “Heard that the Supreme Court rejected the court case of Mr Swamy. Nice way to end lunch with Ratan Tata.”
Responding to the unanimous opposition of incumbent carriers, both low-cost carriers and full-service ones, a top official at the civil aviation ministry said: “No one wants a competition, so there is this opposition from other airlines.”
Earlier, in a letter dated February 11, FIA had, on behalf of Jet Airways, JetLite, and SpiceJet, objected to the grant of AOP to AirAsia India. It had said FDI was allowed in this sector to primarily help the existing airlines, which were facing serious financial crises. It was not meant for greenfield ventures, which would only add to competition and deepen losses. IndiGo, which had earlier kept itself from joining the other players, also decided to send a letter, on February 17, raising objections to grant of AOP to AirAsia.
Meanwhile, FIA has decided to oppose the Tata-Singapore Airlines venture as well. “We are starved of capital. Banks are not lending to us. All odds are stacked against us. Obviously, the principles on which we opposed AirAsia India apply to Tata-SIA, too.”
Competing airlines say the government decision to issue an AOP to AirAsia India is not right. “How can the government give them (AirAsia) an AOP when the matter has to be decided by the court? It is just so blatant,” says a top executive of a leading Indian private carrier.
In an unprecedented move, DGCA had invited fresh objections from members of the public before granting an AOP to AirAsia India. The regulator had given a 30-day window to all interested parties to raise objections before it decided on issuing a licence to the Malaysian budget carrier for starting operations through a joint venture (JV) in India. This deadline ended on February 20.
AirAsia India is a three-way JV among AirAsia Berhad (49 per cent), Tata Sons (30 per cent) and Arun Bhatia-promoted Telestra Tradeplace (21 per cent). On April 5 last year, the Foreign Investment Promotion Board had approved the $30-million deal to launch AirAsia India. The airline had received a no-objection certificate from the civil aviation ministry and was also granted in-principle approval for import of 10 Airbus A-320-200 aircraft in December last year.
WAITING IN THE WINGS
Feb 20, '13: AirAsia announces three-way JV for a greenfield low-cost airline at an initial investment of $30 mn; JV is 49% owned by AirAsia Berhad, 30% by Tata Sons, 21% by Arun Bhatia’s Telestra Tradeplace
Mar 6, '13: Receives FIPB approval; formal approval follows on April 5
Sep 20, '13: Gets no-objection certificate from civil aviation ministry
Oct 4, '13: Files application for air operators’ permit (AOP) with DGCA
Jan 20, '14: DGCA seeks objections from public before issuing AOP
Feb 21, '14: DGCA disposes of objections, says AOP will be granted shortly on completion of formalities