Tata-SIA seeks NOC from civil aviation ministry
Besides NOC from MHA, Tata-SIA would have to apply to DGCA for an Air Operator's Permit to commence operations
BS Reporter | New Delhi December 28, 2013
Tata Sons and Singapore Airlines have applied to the civil aviation ministry for a no-objection certificate (NOC) to start a full-service airline in India. The duo had earlier received approval from the Foreign Investment Promotion Board (FIPB) to set up Tata-SIA Airlines.
Confirming the development, a senior ministry official said: “They have applied for a NOC to start operations. The directors have to get security clearance from the Ministry of Home Affairs after which we can give them an initial certificate.”
Besides the NOC from the ministry, Tata-SIA will have to apply to the Directorate General of Civil Aviation for an air operator’s permit to commence operations. The official added: “The date of commencement of operations would primarily depend on the preparedness of the airline to furnish the relevant documents to the DGCA.”
Since the airline has applied for an NOC only now, it may not be able to start operations in the summer schedule of 2014.
Tata Sons tied up with SIA to launch a full-service carrier in India at an initial investment of $100 million on September 19. The Tatas will be the driving force in the venture with a 51 per cent stake.
Substantial ownership and effective control of the proposed airline will be with Tatas. Singapore Airlines would have a minority representation on the board and "will not be in a position to have 'de-facto' control over the Board. The board of the proposed Tata SIA Airlines Limited would eventually have six directors, Tata Sons and Singapore Airlines had said in its application to FIPB.
While four of the directors would be nominated by Tata Sons, the remaining two directors would be representatives of Singapore Airlines. The Chairman of the board will always remain a Tata nominee, the partners have said in their application. The Chairman and at least two-thirds of the directors of the Tata-SIA board will be Indians to conform with the guidelines of the FDI policy.
According to the MoU inked between Tata Sons and Singapore Airlines on Sep 19, the board of the proposed joint-venture company is initially scheduled to comprise three directors.
While two directors – Prasad Menon and Mukund Rajan – will be nominated by Tata Sons, Mak Swee Wah is the initial director nominated by SIA. The board will be chaired by Menon. Subsequently, the board would be expanded to include six directors.
The JV company will be incorporated in New Delhi and its principal place of business shall be India at all times. The airline has made Delhi its operational hub because of the huge capacity constraints in the Mumbai airport and better infrastructure facilities at the Delhi airport.
Tata-SIA has said it would like to operate international flights from India depending upon government approvals. At present, Indian government rules do not allow domestic airlines less than five years in operations and with a fleet of less than 20 aircraft to commence international operations. The ministry of civil aviation is drafting a cabinet note to amend the policy.
The Tatas already have a partnership with Malaysian carrier AirAsia for a low-cost airline that's likely to start operating in India later this fisca