New Delhi: Tata group patriarch Ratan Tata, the chairman emeritus of the $100 billion conglomerate, met aviation minister Ajit Singh in the capital on Friday to discuss the group’s proposal to start an airline with Malaysia-based Air Asia Bhd, a ministry official said, declining to be named.
add_main_image“It was a courtesy call. The meeting happened at about 4 pm and lasted for about half-an-hour,” this official said.
AirAsia has sought permissions to start an airline, likely to named AirAsia India, with Tatas.NextMAds
AirAsia has said it will hold a 49% stake in the proposed joint venture, Tata Sons Ltd will own 30%, and Arun Bhatia of Telestra Tradeplace Pvt. Ltd will hold the rest.
Tata’s meeting with the minister preceded a decision on the proposed airline by the Foreign Investment Promotion Board, which will take up the Air Asia application on 6 March.
Separately, Bhatia, accompanied by a family member, and a Malaysian representative of AirAsia also met Ajit Singh on Friday, the same official cited above said. In between the talks with Tata and the Bhatias, Singh met Congress president Sonia Gandhi, the official said.
Tata group chairman Cyrus Mistry, who succeeded Tata after he retired in December, was not present in the meeting. AirAsia CEO Tony Fernandes could not personally meet the minister because he had a prior appointment, the official said.
“We confirm the meeting. It was a courtesy meet,” a spokesman for Tata Sons, the group holding company, said.
Once FIPB approves the proposal, the partners will apply for an airline license from the aviation ministry. sixthMAds
If cleared by FIPB, it will mark the first investment in India by an overseas airline since the government in September liberalized foreign direct investment in aviation by allowing foreign carriers to purchase stakes in local ones.
Air Asia proposed the joint venture even as Etihad Airways PJSC and Jet Airways (India) Ltd worked towards finalizing a deal for the Abu Dhabi-based airline to buy a 24% stake in Jet. In the middle of their negotiations, Jet Airways owner Naresh Goyal and Etihad officials also met Singh and other senior Indian officials.
Those meetings took place “when their deal was just an intent to invest”, said Shakti Lumba, an independent aviation consultant formerly with Air India and the low-cost carrier Indigo.
“What these people have done is they have formed the company, they have gone for approvals, they have made their intentions clear. That they met Singh is the logical thing to do. If they had not met it would have been abnormal,” Lumba said.
The new airline is looking to start flying from this year-end with 3-4 planes and an initial investment of about $30 million. The proposed joint venture will operate from Chennai and will focus on providing domestic connectivity to tier-II and tier-III cities, a statement by the Malaysian airline had said earlier this week.
This airline will mark the return of the Tata group to aviation. State-run Air India grew out of Tata Airlines, which began flights in the 1930s. The government nationalized it in 1953.
