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Business News/ Politics / Policy/  Delhi high court refuses stay on AirAsia India launch

Delhi high court refuses stay on AirAsia India launch

AirAsia India can now go ahead and seek a permit from the aviation regulator to operate an airline

Swamy’s petition questions the clearance given to AirAsia to start a low-fare airline in India with Tata Sons. Photo: ReutersPremium
Swamy’s petition questions the clearance given to AirAsia to start a low-fare airline in India with Tata Sons. Photo: Reuters

A Delhi high court bench on Wednesday declined to temporarily halt the process of granting regulatory approvals to AirAsia India, as requested by petitioner Subramanian Swamy, but will further hear the matter on 11 December.

“It appears that these (the approvals granted) are not final," justice Manmohansaid. “Many other regulatory approvals remain." The matter is being heard by a two-judge bench led by chief justice N.V. Ramana.

The government has granted a no-objection certificate to AirAsia India to start an airline in India and is now seeking an airline licence from regulator Directorate General of Civil Aviation.

Malaysia’s AirAsia has a 49% stake in AirAsia India, Tata Sons Ltd has 30%, and Arun Bhatia’s Telestra Tradeplace Pvt. Ltd owns the rest.

In the public interest petition (PIL) filed by the Bharatiya Janata Party member, Swamy has challenged the government’s decision to go ahead with regulatory processes allowing foreign direct investment in new airlines.

He has also sought a stay on the government’s approval and regulatory approvals to Air Asia. The court is yet to decide the issue of stay and the larger matter, pertaining to the policy of the government, will be heard at a later date.

AirAsia India, though not a party in the matter directly, was represented by chief executive Mittu Chandilya and lawyer Abhishek Manu Singhvi. The airline is hoping to fly within the next five months from its base in Chennai.

AirAsia group chief executive Tony Fernandes welcomed the court’s decision, saying India needed “true low-cost airlines" so that more people could fly. “There is no true low-cost airline in India. Flying is not only for the rich," he said in a post on Twitter. “It takes loads of work to change regulator’s minds."

The decision on this petition impacts all other upcoming airlines that hope to bring in foreign airline investment, including Tata SIA Airlines Ltd, in which Singapore Airlines Ltd has a 49% stake.

The government, through solicitor general Mohan Parasaran, opposed any interim stay being granted before the matter is finally heard. The issue cannot be challenged in a PIL, Parasaran argued. Swamy’s allegations are “non-applicable to policy issues" and the “general public in not affected", which is a requirement for such litigation, he said.

Swamy has challenged the “illegality" in the implementation of the policy regarding foreign direct investment in aviation. He told the court that the government eased the policy to assist cash-strapped airline firms. The investment policy cleared in September was meant for only existing airlines and not starting new airlines with foreign airline funding, he argued.

The aviation ministry does not discriminate between new and existing projects and that the “policy has been rightly implemented", Parasaran said, reflecting the government’s view.

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Published: 30 Oct 2013, 03:57 PM IST
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