Tata group today joined hands again with Singapore Airlines (SIA) to start a new full service airline in India with an upfront investment of USD 100 million, eighteen years after their first failed attempt.
Tata Sons, the holding company of most of the operating firms of the over USD 100-billion salt-to-software conglomerate Tata group, has signed an MoU with SIA under which it will own 51 per cent stake in the proposed carrier. The rest will be with Singapore Airlines.
The partners will make an initial investment of USD 100 million to launch the airline, which may take off next year after necessary clearances, sources said.
The group, which had in February announced a partnership with Malaysia's Air Asia for a low-cost carrier in India, said it has applied for approval from the Foreign Investment Promotion Board (FIPB) to establish the new airline which will be based here in the Capital.
The initial Board of the new carrier will have three members, two nominated by Tata Sons and one nominated by Singapore Airlines. The Chairman will be Prasad Menon, nominated by Tata Sons.
This is the third attempt by the two partners to enter the Indian civil aviation sector.
In 1995, they had applied to FIPB for a full service airline, which was cleared a year later but the venture never took off due to a change in the civil aviation policy in 1997 that barred foreign carriers from holding stake in domestic airlines.
The deal did not come through and years later former Chairman Ratan Tata had famously remarked that that the deal failed because the group refused to bribe a Union minister.
The government last year changed policy to allow up to 49 per cent foreign investment in domestic airlines.
