Malaysian budget carrier, AirAsia’s joint venture with the Tatas and Telstra group for a domestic airline moved another step closer to take-off following approval from the government on Tuesday. AirAsia’s proposal, cleared by the Foreign Investment Promotion Board (FIPB) on March 6, was given a formal go-ahead on Tuesday, according to an official statement issued by the Finance Ministry which put the investment at Rs.80.89 crore.

The venture will now need operational clearances such as the Air Operator’s Permit from the Director General of Civil Aviation (DGCA).

Talking to journalists here, Civil Aviation Minister Ajit Singh said the AirAsia JV had not yet submitted any application to the Aviation Ministry. “There were some concerns and procedural issues with regard to the proposed airline. We will look into it quickly. But all that will depend on how fast they provide us the information regarding safety, aircraft, pilots and airworthiness of aircraft. Any clearance will depend on how fast they give all this information, which will be required by the Director General of Civil Aviation (DGCA),” he said.

Signalling the progress of approvals, AirAsia’s CEO, Tony Fernandes, tweeted: “We’re hiring soon… India here we come” and in another tweet said: “Look out for dates soon at this space.” The stock market greeted the government approval to AirAsia by marking down the price of competing airlines such as Jet Airways and SpiceJet. The latter’s stock price fell by 4 per cent as the market seemed to think that it will be hit the most by AirAsia’s Chennai base.

Following the opening up of the aviation sector to foreign direct investment (FDI) last September , AirAsia had formed a joint venture with Tata Sons and Arun Bhatia of Telestra Tradeplace to launch a new airline in India.

AirAsia Group CEO Tony Fernandes had recently said the new airline would be based out of Chennai and, in the initial phase, would concentrate on destinations in South India and would also focus on providing connectivity to small towns.

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