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India Tata-AirAsia launch likely by June
Publication Date : 06-03-2013
Ahead of the Foreign Investment Promotion Board's (FIPB) nod to its proposed tripartite joint venture with Tata Sons and Telestra Tradeplace, the Kuala Lumpur based AirAsia is believed to have advanced the launch of new low cost domestic carrier from end 2013 to May-June in view of the massive demand for tickets on all domestic routes during the summer vacation.
The FIPB is expected to take up AirAsia's application for the first-ever foreign direct investment (FDI)--with a 49 per cent cap--in the country's aviation sector tomorrow. Tony Fernandes, CEO of AirAsia has been a frequent flyer to Delhi to ensure that the project does not get mired in technicalities.
Lending a helping hand, Tata Sons’ chairman emeritus Ratan Tata also called on the aviation minister Ajit Singh in Delhi last Friday. The visit was described as a “courtesy call” by Bombay House although it is known in the aviation sector that Tata has been searching for an opportunity to return to the aviation sector. He came close to striking a deal with Singapore Airlines about a decade ago but had to abandon the plan as he himself disclosed that the Tata Group could not comply with an alleged bribe demand by a minister.
In AirAsia-Tata Sons-Telestra Tradeplace joint venture, the Malaysian airlines will have 49 per cent stake and its Indian partners investing 30 per cent and 21 per cent respectively. The aviation sources say AirAsia CEO Fernandes--who is not an alien to the country because his ancestors are from Goa--has visited the country several times after the JV was announced in February searching for suitable executives and mid-management cadre.
The proposed new airline will have to submit a list of key officers to the Director General of Civil Aviation so that the regulator is satisfied with their qualifications and experience. Sources say, to start with AirAsia may spend US$30 million to start flight operations in the country with Chennai as its main hub.
Speculations are rife about AirAsia trying to recruit experienced staff from the grounded Kingfisher Airlines. Even the name of Sanjay Agarwal, the KFA CEO, is being mentioned in some aviation quarters.
The KFA has flatly denied the reports as baseless. But some seasoned pilots and commanders do say in confidence that they have been approached.
The common factor between AirAsia and Kingfisher Airlines is that they both have most number of A320 aircraft in their fleets. To start with the new joint venture that is quintessentially an economy-fare airline will connect more than 50 tier I and tier II destinations within the country.
The Tatas have clarified that they would not have much administrative participation in the JV except a couple of members on the board of directors. Ratan Tata had once been chairman of Air India, albeit briefly. Founded by Tata Sons in 1932, Air India became national carrier when it was nationalised in 1953.