Another New Airline in India

[Hogger60]

Singapore Airlines, Tata Sons to form full-service airline in India

STRAITS TIMES
Published on Sep 19, 2013
7:09 PM


NEW DELHI (Reuters) - India's Tata Sons conglomerate and Singapore Airlines will form a full-service airline based in New Delhi, the Indian group said on Thursday.

Tata Sons will own 51 per cent and Singapore Airlines will own the remainder, Tata said.

Tata is a partner in a separate joint venture with Malaysia's AirAsia that plans to launch a low-cost airline in India

[ironbutt57]

A feeding frenzy in progress..Air India better get their act together or else....:eek:

[vinayak]

Wonder the fate of AA

[Stallone]

http://www.channelnewsasia.com/image/312670/1379590211000/large16x9/768/432/sia-is-regarded-as-a.jpg

Singapore Airlines and India's Tata conglomerate announced on Thursday they would set up a new full-service airline based in New Delhi.

Singapore Airlines (SIA) and Tata Sons have signed a memorandum of understanding and applied for government approval for the new carrier, a joint statement said.

Its establishment "will help further stimulate demand for air travel", it said, adding the plan would be subject to regulatory approvals including from India's foreign investment promotion board.

The new carrier "will be based in New Delhi and will operate under the full-service model", the statement said.

Tata Sons will own 51 per cent of the carrier and SIA 49 per cent.

"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."

Prasad Menon, chairman of the proposed new carrier, said Tata believes civil aviation in India has sustainable growth potential.

"We now have the opportunity to launch a world-class full-service airline in India."

A spokesman for SIA told AFP the new airline will begin with domestic services.

"We would like the airline to operate international services but that will depend on obtaining further regulatory approvals," the spokesman said.

Details of the new carrier's branding, management team and products and services will be announced later.

Mahantesh Sabarad, an analyst with Fortune Equity Brokers, told AFP in Bombay the Tata group had always wanted to be in aviation.

"Maybe their ambitions have been renewed after India relaxed investment norms for the aviation sector last year," the analyst said.

Sabarad said SIA "would be keen to be in India" due to its long-term growth potential.

The new airline would be the Tata group's second venture into India's aviation sector in recent months.

In March, Malaysia-based AirAsia won approval from India's foreign investment panel to set up an airline in a joint venture with the Tata group and entrepreneur Arun Bhatia's Telstra Tradeplace.

AirAsia will own 49 per cent, the Tata group 30 per cent and Telstra the balance of 21 per cent.

Speculation about foreign interest in Indian carriers has been brewing since the government in September last year said it would allow overseas airlines to take up to 49 per cent stakes in domestic operators, as part of a blitz of economic reforms.

The sector, once vaunted as a symbol of India's economic vibrancy, has seen its fortunes fade in the face of aggressive fare rivalry, a slowing economy, over-expansion, rundown infrastructure, high airport charges and expensive fuel.

Indian carriers need money to fund expansion and cut debt after years of losses caused by the fierce fare battles and rising fuel costs.

Only privately held low-cost carrier IndiGo was in profit in the year to March 2012, out of India's six main scheduled carriers.

Kingfisher Airlines, controlled by liquor baron Vijay Mallya and once the second-biggest carrier, remains grounded by a cash crunch.

Singapore Airlines, India's Tata to establish new carrier - Channel NewsAsia (http://www.channelnewsasia.com/news/business/singapore-airlines-india/819314.html)

[VijayMallya]

Eighteen years on and Tata is still trying to start an airline.


Attempt Number 1
In 1995, they had applied 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.

Lot of people cited this a Jet Airway's victory!

The deal did not come through and years the Tata's had famously remarked that that the deal failed because the group refused to bribe!


Attempt number 2
In 2000, Tatas and Singapore Airlines had jointly bid for the 40 per cent divestment of Air India. Come BJP led alliance and this was canned.

Attempt Number 3
As much as I hope for them to start (attempt number 3), I am really not sure if this is going to...

With this, the FIPB although having approved AA there are some quarters in the ministry objection to the fact the controlling stake holder isn't Indian.


With tata's being the single controlling stake holder perhaps, just perhaps this is going to be easier.


Having said that, I am still is little skeptical on them starting at all.

[Iver]

Well, if Tata are going to select a strong airline partner then they did a good job with Singapore Airlines... Now if the protectionist government can get out of the way then maybe we can see some progress with this venture and the AA venture to replace Kingfisher and some of the other weak airlines.

[Hogger60]

Another view on the proposed airline from Ben Sandilands blog at Crikey.com.

Singapore Airlines allies with Tata in new India foray

Ben Sandilands (http://blogs.crikey.com.au/planetalking/author/bensandilands/) |
Sep 20, 2013 8:17AM


Once more into the cauldron, Singapore Airlines joins Air Asia and Etihad in an attempt to own a slice of the action in India’s massively emerging but money shredding airline industry

http://blogs.crikey.com.au/planetalking/files/2013/09/Jet-Airways-777-300ER-610x396.jpg (http://blogs.crikey.com.au/planetalking/2013/09/20/singapore-airlines-allies-with-tata-in-new-india-foray/jet-airways-777-300er/)

A Jet Airways 777-300ER, part of Etihad's India ambitions: Wikipedia Commons

The lure of investing in airlines in India has again gripped Singapore Airlines, despite a long and sometimes costly history of frustrations and disappointments for itself and other similarly infatuated not-from-India carriers down the years.

But this time Singapore Airlines appears to have the gigantic India conglomerate Tata as a partner in a 51:49 joint venture in which Tata, which knows everthing there is to know about power and authority in India, will provide the connections and Singapore Air will provide a lot of money. The fundamentals of the deal and prior events are glided over in this Reuters report. (http://www.reuters.com/article/2013/09/19/us-tata-singaporeairlines-idUSBRE98I0EH20130919)

Is this being unduly cynical? No. The reality of India aviation is that it is the air transport equivalent of a killer black hole feeding on all of the money, vision and hard work that passes too close to its gravitational force field to escape, and which is then dragged to its doom.

If anyone can navigate away from such a fate Tata would have to be well placed, and thus, well chosen by Singapore Airlines.

However Singapore Airlines isn’t alone in finding an India ally in Tata. It’s arch rival when it comes to investing in low cost ventures, Tony Fernandes at Malaysia based Air Asia, also has a deal with Tata (http://timesofindia.indiatimes.com/business/india-business/AirAsia-set-to-fly-with-Tatas/articleshow/20886795.cms), and whatever might be said about Air Asia’s various adventures and misadventures in pursuing a low fare franchise throughout Asia, he has made Singapore Airlines look very ordinary in its own efforts with its underperforming involvements in Tiger Airways since 2004.

No doubt looking on with interest at the Singapore/Tata engagement will be Etihad Airways, which has a pending 24% interest in India’s Jet Airways, which has been pending and pending for what seems like an eternity, which is of course how the passage of time might seem to slow to an observer able to approach a cosmic black hole, where it is time rather than light that is extinguished.

Someone, somehow, needs to make the airline game work in India on a scale befitting its astonishing and rapidly growing economy.

[cyrilroy21]

:)

Tata-Singapore Airlnes pact was months in the making - The Economic Times (http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/tata-singapore-airlnes-pact-was-months-in-the-making/articleshow/22776700.cms)

Singapore Airlines, Tatas to float $100m airline - The Times of India (http://timesofindia.indiatimes.com/business/india-business/Singapore-Airlines-Tatas-to-float-100m-airline/articleshow/22775510.cms)

[hifly787]

Don't get excited ! Neither Air Asia or Tata/SIA will see the light of day anytime before 2016. FIPB Approval / security clearances/ High airport charges at New Delhi/ corporate affairs clearances and last a highly confusing general election looming on the horizon .
Air Asia just tried to scam AAI Chennai to use the old domestic terminal at no charges. You can guess the answer they got!

[Aeronotix]

Even if they get going by 2016, there is always Dr.Subramanian Swamy to spoke the rolling wheel with his PILs. By then he would have finished his legal battle with the Jet-Etihad & Air Asia deals and having free time on hand will clobber Tata-SIA too.

Politics in Aviation = Negative growth, bleeding airlines, unemployment, cash rich ministers & babus.