SIA and Indian group make tieup on airline

SIA and Indian group make tieup on airline

NEW DELHI (AFP): India's industry ministry has apparently
cleared the way for Singapore Airlines (SIA) to tie up with the
country's Tata group to launch an airline here, the Press Trust
of India (PTI) said yesterday.

The ministry cleared the controversial venture on grounds that
"no good proposal ... of such a mega nature should be held back,"
the news agency quoted an unidentified official as saying.

The proposed SIA-Tata tie-up, opposed by India's civil
aviation ministry, would lead to the country's largest private
airline in terms of equity.

The US$708-million joint venture, provisionally approved after
18 months of wrangling, needs further approval from the cabinet
of Prime Minister H.D. Deve Gowda.

It was cleared earlier by the Foreign Investment Promotion
Board (FIPB).

Earlier governments in New Delhi refused to let the FIPB clear
it despite requests from Singapore and the Tatas.

The joint venture is to have 60 percent Indian participation.
Singapore Airlines would control the rest of equity.
The project involves buying 19 aircraft -- with spares,
maintenance equipment and other facilities -- for around 630
million dollars during the first five years.

It would begin with a route network of 13 sectors, which would
be raised to 28. The airline would initially employ some 2,500
people.

The Tatas have maintained that the carrier would be an Indian
airline and the collaboration with Singapore Airlines was sought
only "with a strong desire to give India a world class domestic
airline."

New Delhi first rejected the tie-up in August 1995, citing
"inadequacy of necessary information, aircraft type not
conforming to government policy, non-submission of security plan
and non-acceptability of base of operation."

Many of India's fledgling private airlines had also come out
against the entry of the Singapore carrier. It also met with
opposition from state-owned Indian Airlines and Air India.