It has been a smooth flight so far for Tata-SIA Airlines. Just over a month after submitting its proposal to the Foreign Investment Promotion Board — the first-stage clearance — it got the board’s approval. But the new airline still has some ground to cover if it wants to launch services by June next year, as planned.
The new airline will now have to get a No Objection Certificate from the Civil Aviation Ministry. Armed with this certificate, the airline has to approach the Directorate-General of Civil Aviation for an Air Operating Permit (AoP), a pre-requisite for starting operations.
Tata-SIA is promoted by Tata Sons, with a 51 per cent stake, and Singapore Airlines, which holds the balance.
In comparison, the other new airline in which Tata Sons is involved, AirAsia India, has faced rough weather.
AirAsia India — a three-way joint venture between Malaysian low cost airline AirAsia, Tata Sons and Telestra — approached the FIPB on February 20.
The proposal soon ran into rough weather. The Civil Aviation Ministry was of the view that the change in Government rules to allow foreign airlines to acquire a stake in domestic airlines was to help existing airlines. The squabbles between the Finance and Civil Aviation Ministry meant that the FIPB clearance for AirAsia India came only in early April. It’s troubles did not end there.
The Civil Aviation Ministry declined to send the proposal for the mandatory Home Ministry clearance till all the names of the board of directors were provided. All this meant that the No Objection Certificate from the Civil Aviation Ministry came in only at the end of September.
Now the low-cost airline is working with the DGCA to expedite the process of getting all clearances to take off. But no one is putting a date on the launch of the new airline, just yet.
Jet-Ethiad deal
The story of Etihad Airways buying a 24 per cent stake in Jet Airways has been just as slow and meandering.
The two parties announced the deal in April and have been dogged by controversy since. Initially, the Securities and Exchange Board of India and Foreign Investment Promotion Board had reservations about the deal.
The two airlines were able to convince the regulators and finally got FIPB clearance towards the end of July. Cabinet clearance, required because the deal size was more than Rs 1,200 crore, came in early October
But even now, seven months since the announcement, the deal awaits the nod from the Competition Commission of India for the two airlines to finalise their marriage.
How long it will be before Tata-SIA Airlines starts operations is anybody’s guess.
Its Chairman Prasad Menon told newspersons that the carrier hopes to take to the skies by May-June next year.