 "Tata-SIA to fly overseas as soon as govt changes 5-yr local ops rule")
The new airline, being jointly set up by Tata Sons and Singapore Airlines, will be flying from the winter schedule of 2014-15. In November, this venture received necessary permissions from the Foreign Investment Promotion Board. Tata Sons will hold majority 51 percent equity while SIA will hold the remaining 49 percent.
[caption id=“attachment_1127509” align=“alignleft” width=“380”]  AFP[/caption]
Two key decisions could see this eagerly awaited airline get an immediate legup over legacy carriers already operational in India:
- It plans to begin international operations the minute a current rule, which necessarily requires five years of domestic operations before flying international, is lifted. The rule is under active review of the Ministry of Civil Aviation. It may well be relaxed soon.
- Once it gets permission to fly overseas, the new airline may quickly put in an application for a membership of Star Alliance, the most prestigious global grouping of airlines. This would give it a further edge over well entrenched competitors like Air India - an airline which has gained entry into Star Alliance after several frustrating years of trying and then only on its second attempt.
Speaking to Firstpost, top officials associated with the airline said that an application for No-Objection (NoC) will shortly be submitted to the Ministry of Civil Aviation. And then, once the NoC is received, the Tata-SIA team will quickly apply for a Scheduled Operator Permit with aviation regulator DGCA.
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More Shorts“The application seeking NoC is imminent and thereafter we will seek the license to operate. I am certain the airline will be launched in the second half of 2014, which means it will be there for the winter schedule next year,” said this official.
The official said a team is being put in place for the airline, which will be headquartered in New Delhi, and that an office is almost finalised for the airline. He said there is still no firm decision on which aircraft type the new airline will use and negotiations were on with both Airbus and Boeing Co for finalising this quickly. This official said the airline would like to initially begin with only five aircrafts.
On Star Alliance, he said it would be quite logical to get into a big international alliance but all these decisions will happen only once the airline gets permission to begin international operations. “These things will happen but as of now, we are not even permitted to fly domestic …… lets first get the flying permit. If the Government waives the five year mandatory domestic flying clause, we would like to immediately begin overseas operations”.The official made it clear that the new airline is determined to be a full service carrier though cost structures in India do not support this model as of now. “We are clear, the basics of full service will be there from day one. So we will offer economy and business class travel, there will be food on our flights and there will be a well defined frequent flyer programme. What other differentiation we will do, will become clear closer to launch. We will not be a budget carrier”.
The official hoped that by the time the airline gets off the ground, cost structures - specificially taxes surrounding aviation turbine fuel - will have been rationalised.
It is interesting to see that while fast track clearnaces have happened for the Tata-SIA venture till now, the same speed has not been the norm for Tata Sons’ other airline venture - with AirAsia and a third partner. AirAsia India is still not operational and there have been reports of it getting a flying permit only by January end. So will AirAsia India begin flying from the summer schedule (which kicks in from April) next year or give company to the Tata-SIA venture from the winter schedule in 2014-15?
The Tata-SIA airline will be operating from the Delhi airport, where Air India is already a large player. It would be interesting to see not just the choice of aircraft that the new airline makes, but also its strategy on countering competition from Air India which now also has the Star Alliance advantage.
A story in Mint newspaper recently said the Tata-SIA airline has appointed several members of its top leadership team including Phee Teik Yeoh, who is likely to lead the Tata-SIA project and is currently divisional vice-president (IT application services) in Singapore Airlines. Yeoh has been joined by Giamming Toh, who has shifted from his position of GM India for Singapore Airlines to the new team. Besides these, Singapore Airline’s captain of the A330 fleet Mandesh Singh and Quah Lin, regional maintenance manager, will also help with the project.
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