SIA, Tata to run full-service carrier in India

Failed courtship that started in 1994 now set to be consummated[SINGAPORE] If at first you don't succeed, try again - even if it's nearly two decades later.存倉Singapore Airlines (SIA) has unveiled plans to get into bed with India's Tata group again to set up a joint-venture airline in that country.In a surprise announcement yesterday, SIA said it had signed a Memorandum of Understanding with Tata Sons and applied for Foreign Investment Promotion Board (FIPB) approval to establish a new full-service airline in India.Subject to FIPB and other regulatory approvals, the airline will be based in New Delhi.Total initial investment will be US$100 million, with Tata Sons owning 51 per cent for its US$51 million share and SIA the remaining 49 per cent.All this comes nearly two decades after SIA and Tata first tried - and failed - to start up their joint-venture airline in India in 1994.Faced with intense lobbying by Air India and other domestic players, the Indian government changed the rules and barred foreign airlines from holding stakes in domestic start-ups. SIA then tried to modify its participation to that of technical support, but even this was shot down by the authorities.So strong was the anti-foreigner sentiment in Indian aviation circles that even SIA's aircraft leasing associate, Singapore Aircraft Leasing Enterprise (now BOC Aviation after Bank of China bought it some years ago), was barred from leasing planes in India.Tata finally abandoned plans for a tie-up with SIA in 1998. However, in 2000, when India was mulling the privatisation of unprofitable Air India, SIA and Tata once again joined hands to form a consortium in hopes of buying into the ailing carrier and turning it around. But a year later, in September 2001, SIA ditched its plans.Fast forwa迷你倉d to 2012, and the Indian government unexpectedly liberalised ownership rules in the aviation sector.In September 2012, New Delhi ruled that foreign carriers would be allowed to own up to a 49 per cent stake in start-ups. This prompted Malaysia's AirAsia early this year to set up a joint venture with Tata to start up a low-cost venture in India.Now comes a full-service joint venture with SIA finally realising a long-held dream to become a notable player in the second most populous nation.The initial board of the yet-to-be-named carrier will have three members, two nominated by Tata Sons and one from SIA. The chairman will be Prasad Menon."We have always been a strong believer in the growth potential of India's aviation sector and are excited about the opportunity to partner Tata Sons in contributing to the future expansion of the market," said SIA chief executive Goh Choon Phong. "Tata Sons is one of the most established and respected names in India. With the recent liberalisation, the time is right to jointly bring consumers a fresh new option for full-service air travel. We are confident the joint-venture airline will help to stimulate market demand and provide economic benefits to India."Mr Menon said Tata Sons feels civil aviation in India offers sustainable growth potential. "We are delighted that we are partnering in this endeavour with the world-renowned Singapore Airlines," he said.The ability to establish an Indian associate would be a major move for SIA to counter the competition from Middle Eastern carriers. Besides tapping what is potentially one of the largest and fastest growing aviation markets in the world, SIA will also be able to move the "battle" closer to its Middle Eastern rivals, who do a thriving business serving the Indian market.自存倉