Tata Sons, Singapore Airlines join hands again for a new carrier

Eighteen years after its failed attempt Tata group on Thursday joined hands again with Singapore Airlines to start a new fullservice airline in Indiau00a0 Tata Sons the holding company of most of the operating firms of the over USD 100billion salttosoftware conglomerate Tata group today signed an MoU with Singapore Airline under which it will own 51 per cent stake in the proposed carrier The rest will be with Singapore Airlines The group which had in February announced a partnership with Malaysia39s Air Asia for a lowcost 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 in New Delhi Ratan Tata 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 quotIt is the Tata Sons39 evaluation that civil aviation in India offers sustainable growth potential We now have the opportunity to launch a worldclass fullserve airline in Indiaquot Menon said of the proposed venture quotWe have always been a strong believer in the growth potential of India39s aviation sector and are excited about the opportunity to partner Tatas Ons in contributing to the future expansion of the marketquot said Singapore Airlines CEO Goh Choon Phong According to Goh Tata Sons is one of the most established and respected names in India quotWith the recent liberalization the time is right to jointly bring consumers a fresh new option for fullservice air travel We are confident that the joint venture airline will help to stimulate market demand and provide economic benefits to Indiaquot he said 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 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 In 2000 Tatas and Singapore Airlines had jointly bid for the 40 per cent divestment of Air India but withdrew from it in December 2001 The disinvestment of Air India did not take place due to political opposition Unlike in its tripartite partnership with AirAsia and Arun Bhatia39s Telestra Tradeplace Pvt Ltd for Air Asia India in which Tata Sons holds 30 per cent stake but no operating role in the new proposed full service carrier it will be in driver39s seat Details of the airline39s branding management team and products and services will be announced in due course the company said The Tatas have a long history of association with civil aviation in India In 1932 JRD Tata had started Tata Airlines which was later in 1946 renamed as Air India which was nationalised 1953u00a0