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Local airlines emerge as only dissent to Tata-SIA

LiveMint logoLiveMint 04-06-2014 Tarun Shukla

New Delhi: Tata SIA Airlines Ltd’s plan to start a full-service airline by October has been opposed only by a lobby of local airline operators in comments sought by the aviation regulator.

In April, the Directorate General of Civil Aviation (DGCA) had sought comments from the public on the Tata-SIA airlines project as part of a standard process before issuing it a licence to operate flights. The last date for sending comments ended on 27 May.

DGCA has received five letters regarding the application, said a government official who declined to be named. These include four letters in support of the airline and one opposing it.

The opposition is from lobby group Federation of Indian airlines (FIA), led by local private airline IndiGo, Jet Airways (India) Ltd, SpiceJet Ltd and GoAir. FIA sent their comments on the last date.

Air India Ltd has not opposed the Tata-SIA entry.

The other four letters are from pilots, engineers and not-for-profit organizations.

“Kids have sent letters: a pilot saying I will get a job and an AME (aircraft maintenance engineer) also,” said a second government official who also declined to be named.

The grounding of Kingfisher Airlines Ltd and Paramount Airways Pvt. Ltd has led to an oversupply of manpower in India’s aviation sector. Nearly 8,000 trained pilots and several hundred aircraft engineers are without employment.

FIA has opposed the new airline, saying government policy allows foreign airlines to invest only in local airlines that are already operating.

At the time when policy was framed in 2012, there was a mix-up in interpretation, which was later clarified by some arms of the government to include both new and existing airlines.

FIA has filed a lawsuit challenging the approvals given to Tata-SIA and AirAsia.

Bharatiya Janata Party’s (BJP’s) Subramanian Swamy has also filed a lawsuit against the launch of Tata-SIA and AirAsia on similar grounds but he has not sent his views on Tata-SIA to DGCA. The case is expected to be heard on 11 July by the Delhi high court.

A spokesman for Swamy said the BJP leader has already sent his letter to aviation minister Ashok Gajapathi Raju Pusapati expressing his views on this subject and met him on Tuesday. Pusapati had said last week after taking over that he will hear out Swamy’s views on the matter before discussing it with him further.

“We have already sent the letters to Tata-SIA for their comments on the letters,” said the second DGCA official.

A Tata-SIA spokesman said the replies will be sent soon.

Director general of civil aviation Prabhat Kumar is expected to clear the proposal after the comments are reviewed as there is little opposition, the second official said.

Approvals for Tata-SIA have come in record time so far.

On 24 November, Singapore Airlines Ltd (SIA) said it had received formal clearance to invest in the Indian airline from the Foreign Investment Promotion Board.

The airline then approached the home ministry for its approval on 13 January and the no-objection certificate was granted on 2 April.

Tata-SIA’s launch will mark the realization of an ambition that Tata Sons and SIA have together cherished for one-and-a-half decades, only to be thwarted twice.

In 2000, the two firms abandoned a joint attempt to buy a 40% stake in government-run Air India.

An earlier attempt by the two companies to start an Indian airline with 40% equity contribution by SIA was also aborted. In both cases, political resistance and corporate rivalries were blamed.

In 1932, J.R.D Tata set up Tata Airlines, which was renamed Air India in 1946 and eventually nationalized by the government in 1953.

The aviation ministry has already replied in detail to the Prime Minister’s Office to a question seeking clarity on who had cleared the AirAsia project.

“We have sent a detailed reply on the status,” said aviation secretary Ashok Lavasa, adding that the ministry granted the no-objection certificate to AirAsia following rules.

The PMO had sought details on who had taken the decision on the AirAsia clearances just before a new government led by Narendra Modi took over in May.

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