Tatas and SQ to launch new full-service airline in India

Hot off the press news for today is that the TATAs are looking at a joint venture with SIA (the company that owns Singapore Airlines / SQ) to set up a full-service airline in India. The proposal is for Tatas to own 51%, and SIA 49%, with a projected investment of US$ 100 million (and I'm sure there will be lots of debt involved!). The proposed airline is to be headquartered in New Delhi. For this blog, this is an interesting development, given that I had recently written about how many airlines operate in the Indian skies.

Readers may be aware that the Tatas are one of the Indian joint venture partners with Air Asia, to set up Air Asia India, based in Chennai. Air Asia India was announced in February 2013, and they expect to start operations in the first quarter of calender year 2014.

It is interesting, that this is the Tatas' third attempt at the Indian Aviation sector, after the aviation sector was opened up for private participation in the early 1990s. Their first try was a joint venture with SQ in the 1990s, that fizzled out because the Tatas lost interest after 7 years of waiting and finally withdrew their application. The second was / is the Air Asia arrangement.

News reports quote that there will be no conflict for the Tatas between this venture with SQ, and the existing one with Air Asia - I suppose this is mainly because of the full service v/s low cost models of the two, respectively. The Tatas also apparently see sustainable growth potential in the Indian aviation sector, according to this report on Zee News.

If this is a successful venture, it may be a rather quicker route for the new Tata-SIA airline to join Star Alliance, given SQ is already there and enjoys some clout in *A. Who knows, this may be the ideal replacement for Kingfisher that wound up a few months back.

Here are some press reports where this news item is featured:

First Post
Business Standard
Fox News