After investing a 30 per cent stake in the proposed new low-cost carrier of AirAsia in India, the Tatas on Thursday announced the proposed launch of their very own “world-class full-service airline in India” in which Tata Sons will have the majority stake of 51 per cent, with Singapore Airlines owning the remaining 49 per cent. The secrecy of the elaborate planning and annou-ncement took the Indian aviation sector by storm, with Tata Sons making it clear that approval had already been sought from the Foreign Investment Promotion Board. When asked whether one company could own stake in two carriers in the country, top sources indicated that there was nothing in the rules that disallowed this.
Speaking to this newspaper late on Thursday evening, a spokesman for Tata Sons said they had informed AirAsia about the proposed plan “from the very beginning”.
Tata Sons is the holding company of most of the operating firms of the over-$100 billion Tata group conglomerate that manufactures products from salt to software. The Tatas have a long history of association with civil aviation in India. In 1932, J.R.D. Tata had started Tata Airlines, which was later renamed Air India in 1946 and subsequently nationalised in 1953.
Top sources said the corporate affairs ministry and Sebi may examine various aspects pertaining to the proposed new venture. Tata Sons and Singapore Airlines could make an initial investment of $100 million to launch the airline, which is likely to take off next year after the clearances.