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Business News/ Companies / News/  Tata, Fernandes meet aviation minister; Swamy hardens stand on AirAsia

Tata, Fernandes meet aviation minister; Swamy hardens stand on AirAsia

Tata group chairman emeritus Ratan Tata says he expects AirAsia India to open new dimensions of air travel

Ratan Tata and Air Asia’s Tony Fernandes meet minister for civil aviation Ajit Singh at his residence on Tuesday. Photo: Ramesh Pathania/Mint (Ramesh Pathania/Mint)Premium
Ratan Tata and Air Asia’s Tony Fernandes meet minister for civil aviation Ajit Singh at his residence on Tuesday. Photo: Ramesh Pathania/Mint
(Ramesh Pathania/Mint)

New Delhi: Ratan Tata, chairman emeritus of the Tata group, said he expects low-cost airline AirAsia India to open new dimensions of air travel in the country.

Tata Sons Ltd owns 30% in AirAsia India. AirAsia Bhd has a 49% stake in the venture and Arun Bhatia of Telestra Tradeplace Pvt. Ltd owns the rest.

Ratan Tata is also an adviser to the proposed airline, which will have its hub in Chennai and expects to start flights later this year. A private pilot licence holder, Tata piloted a plane on Tuesday to bring AirAsia chief Tony Fernandes from Mumbai to Delhi to hold meetings with aviation minister Ajit Singh and other government officials.

“This is a different type of enterprise that Mr. Fernandes is bringing and hopefully spread the use of air travel across India in a new dimension and I think the Tata group is very pleased to be associated with it," Tata said after meeting Singh with Fernandes.

Air India Ltd, founded in 1932 by the Tata group, was later nationalized by the government. In the 1990s, the Tata group tried to re-enter the business by launching an airline in partnership with Singapore Airlines Ltd, but the government had then nixed the plan. To a question on whether he regrets the fact that he was unable to launch an airline with Singapore Airlines, Tata said it wasn’t as if he didn’t want it. “If we didn't come in earlier, it was not because we chose to stay out," Tata said.

In early 2011, as Fernandes was waiting to meet officials in the aviation ministry in New Delhi for talks on starting flights to India from Kuala Lumpur, on the wall of the room he was waiting was a poster of J.R.D. Tata, founder of Air India.

Fernandes had told Mint in an interview on 21 February 2013 how he sent a text to Ratan Tata saying, “This is a sign, let’s do it."

When India allowed foreign airlines to invest in Indian carriers in September, Fernandes pushed Tata to take the plunge as he “can’t think of anyone else I would like to do this with".

This was the second formal meeting of Singh and Tata after 1 March.

After the first meeting of Fernandes and the aviation minister, the AirAsia founder had said he wants to do in India what he has been able to do in Southeast Asia.

“The key message that we are trying to say is flying is not elite anymore... every common man in Southeast Asia can now fly and that’s what we would like to bring (here)," Fernandes said.

To be sure, India’s airline market has grown from about 12 million in 2002 to 60 million now after the government gave several airline permits between 2003 and 2006.

The government last month cleared AirAsia’s proposal to invest 80.98 crore in a domestic passenger airline. AirAsia’s licence is waiting for security clearance from the home ministry, after which it needs to be granted a no-objection certificate and an airline permit from the aviation ministry and the regulator, respectively.

“I don't expect it will take too long," minister Singh said in the same briefing.

Meanwhile, Janata Party president Subramanian Swamy, who has taken on the government over allegations of wrongdoing in spectrum allocation in the telecom sector, hardened his stand on AirAsia’s venture into India on Tuesday.

Swamy had written to Prime Minister Manmohan Singh opposing this deal last month, Mint reported on 19 June.

“The core illegality in the AirAsia (deal) was pointed out to the Prime Minister in my letter that the existing FDI (foreign direct investment) policy governing the civil aviation sector does not permit any investment in any airlines which are not already existing or functioning," Swamy said in a statement on Tuesday. “In my letter therefore I have demanded the Prime Minister review of this aforesaid permission to allow the joint venture deal, and also to order its revocation which review will clearly mandate. If the Prime Minister fails to do so by 15th July, I shall approach the Supreme Court in a PIL (public interest litigation) seeking cancellation of the FIPB (Foreign Investment Promotion Board) clearance," he said.

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Published: 02 Jul 2013, 01:59 PM IST
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