NEW DELHI, Jan 2: The Tatas have not ruled out a technical tie-up with Singapore International Airlines for their proposed airline.Although the fresh application before the Foreign Investment Promotion Board does not mention any tie-up with the foreign airline, company officials said they were keeping their options open.
``We were not required to mention any technical tie-up in the application, but that does not mean we are not talking to the airline for technical tie-ups,'' a Tata group offical said.
The group has put in an application to the FIPB for permission to start an airline by itself, without any equity participation from a foreign company or airline, in accordance with the aviation policy approved in April last year.
After its first application which sought permission for a joint venture airline with SIA was shot down by the civil aviation minister, C M Ibrahim, the company announced that it would go alone, but with a technical tie-up with the SIA. The ministry sent out mixed signals, with
Ibrahim first denouncing technical tie-ups and later denying his statement.
The draft aviation policy is awaiting government approval and it is not clear whether the final version will permit technical-tie-ups or not. Either way, the Tatas will wait for the nature of approval before deciding upon the technical tie-up, the official said.
The Tatas have scaled down the size from the project from the originally Rs 2480 crore originally planned to just Rs 1475 crore. While 60 per cent of the Rs 695-crore equity will be held by the Tatas, domestic and foreign institutional investors will hold 40 per cent, according to the proposal now before the FIPB.
The airline will begin operations in the first year with a fleet of seven aircraft flying to 12 destinations. In the second year of operations, the company will increase the number of destinations to 21.
The previous application had envisaged equity participation by SIA, but was rejected by the aviation ministry on the grounds that the public sector Indian
Airlines would not be able to survive.
Later, the ministry revised the policy on investment by foreign airlines in the domestic sector. It also directed Jet Airways to offload its 40 per cent foreign holding.
The Tatas expect the proposal will go through this time as it is in accordance with the policy on foreign investment.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
