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Tata Sons and Singapore Airlines, which have partnered to launch a full-service airline in India by October, are going to unveil a new brand identity for their proposed carrier next month. The new name would not have the Tata or the SIA name, confirmed a spokesperson.
The new identity is in line with Singapore Airlines’ strategy. It has preferred to give new brand names to the two other carriers it controls — SilkAir for regional routes and Scoot for its low-cost alternative. It also has an equity stake in Tiger Airways, another low-cost carrier.
The Tata Group also has independent brands — such as Westside for apparel retail, Titan for watches and Tanishq for jewellery. Group firms which use the Tata name pay annual royalty of 0.25 per cent of their respective revenues to Tata Sons, the holding company.
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The new airline brand name is expected to be announced in the first half of next month. The airline would have one aircraft in India by early September and launch operations latest by October. The plan is to begin services in five cities and go up to 11 within a year of operations. The airline will have 87 weekly flights. These will link Delhi with Mumbai, Goa, Bangalore, Hyderabad, Ahmedabad, Jammu, Srinagar, Patna and Chandigarh.
Sources in the know say the airline will mainly have a business- and economy-class configuration. It might have an additional product offering, between the two.
Commencement of operations needs approval of the Directorate General of Civil Aviation (DGCA), which is in the process of examining the application for an air operator’s permit (AOP). Last week, the regulator dismissed objections from the Federation of Indian Airlines against granting an AOP to Tata-SIA. The approval for an AOP, if and when granted by DGCA, would be subject to the interim/final order of the high court here. A hearing is scheduled on September 12 against allowing foreign direct investment (FDI) in new airlines in India.
A senior DGCA official said: “Tata-SIA is in the process of completing the paperwork required for grant of an AOP. After this, the airline will have to demonstrate its preparedness for flying commercially. It will take time to complete all procedures but if all requirements are met, they should receive the permit before scheduled launch of operations in September/October.”
DGCA got six responses to the public notice it issued on May 6, seeking comments prior to granting an AOP to Tata-SIA. There were two broad objections against it getting an AOP. The first objection was over allowing FDI in airline start-ups. “The issue is before the Delhi High Court. The Foreign Investment Promotion Board has clarified that FDI will be permitted in greenfield (new) airlines. It was not in our jurisdiction to decide on the issue,” a senior DGCA official said while dismissing objections against the proposed airline.
The second set of objections was on ownership and control of the airline remaining in Indian hands. “Tata-SIA has said the chairman of the airline will always be an Indian and be appointed by Tata Sons. They have also assured us that even if the board is reconstituted in future, two-thirds of the directors will be Indians appointed by Tata Sons. Effective control will, therefore, remain in Indian hands,” said another official who did not wish to be named.
Tata-SIA Airlines is headquartered in Delhi and has a three-member board. Two are Indians — chairman Prasad Menon and director Mukund Rajan. The other director, Mak Swee Wah, is a citizen of Singapore.
Tata Sons had announced its partnership with Singapore Airlines on September 19, 2013, to launch a full-service airline in India with an initial investment of $100 million. Tata Sons holds a 51 per cent stake and SIA the rest.
The airline has made Delhi its operational hub because of capacity constraints at the Mumbai airport. Tata-SIA has said it would like to operate international flights from India. Government rules do not allow domestic airlines less than five years in operations and with a fleet of less than 20 aircraft to do so.The ministry has drafted a cabinet note to change the policy. The Tatas have a partnership with Malaysian carrierAirAsia for a low-cost airline, which commenced operations on June 12 in India.
