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| DGCA will assess the Tata-SIA’s technical capabilities, including its engineering, safety, security and operational systems, as well as staff and fleet strengths before taking a decision on the application. |
The joint venture between Tata Sons Ltd and Singapore Airlines Ltd (SIA) has sought a permit from the aviation regulator to start operations despite being dragged into a court case brought by Bharatiya Janata Party (BJP) leader Subramanian Swamy against foreign direct investment (FDI) in new airlines.
The process of getting a licence from the Directorate General of Civil Aviation (DGCA) could take about three months. Tata SIA Airlines Ltd, as the joint venture is known, has been aiming to start operations by October.
DGCA will assess the joint venture’s technical capabilities, including its engineering, safety, security and operational systems, as well as staff and fleet strengths before taking a decision on the application, officials said.
“Tata SIA applied for the licence this week,” said a top government official who declined to be named, “The process has been initiated and (the application) would be looked into by each of the head of departments.”
Earlier this month, Swamy dragged Tata SIA Airlines into a case he brought against Tata Sons’ joint venture with Malaysian low-cost carrier AirAsia Bhd.
Swamy argues that a September 2012 decision by the aviation ministry only allowed foreign airlines to invest in existing Indian ones and government agencies had wrongly interpreted it to allow such FDI in fresh start-ups.
He says existing airlines would be hurt by allowing the start-ups.
Swamy impleaded Tata-SIA into the case after aviation minister Ajit Singhon 2 April approved the joint venture’s application, sending it to the DGCA, which needs to give it a licence after assessing its technical capabilities to allow its takeoff.
A spokesperson for Tata-SIA Airlines declined to comment.
The matter on AirAsia India and Tata-SIA is now to be heard on 1 May.
AirAsia India is yet to get its permit. The government official quoted above said the airline has minor issues like an insufficient number of trainers and cabin crew.
Its security and safety manuals have, however, been approved.
The Federation of Indian Airlines (FIA), a lobby group that includes IndiGo,Jet Airways, SpiceJet and GoAir, has also opposed the launch of start-up airlines and gone to court.
India’s airline industry is estimated to have lost Rs.53,311 crore from 2006-07 till fiscal 2012-13, according to CAPA.
The rupee’s 11% depreciation last year and slower economic growth over the past two years that has discouraged air travel have compounded the problems of the industry.
“This sector is hemorrhaging... we don’t know about IndiGo but one look at the P&Ls (profit and losses) of Air India, Jet Airways and SpiceJet will show even to a moron that the last thing we need is more competition,” said a top private airline executive who declined to be named.
Analysts argue otherwise. More airlines will be beneficial for passengers as air fares will drop in the immediate term, said Manet Paes, a former senior executive with Air India and an independent aviation analyst.
Blocking the two start-ups would be seen as a sign of differences surfacing within the government, could potentially have an impact on India’s relations with the Association of South-East Asian Nations that includes Singapore and Malaysia and “showcase a backtrack on policy and decisions”, Paes said.
News From _: Livemint
News From _: Livemint
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