In a second coming, the Tatas have announced plans to set up a domestic airline in partnership with Singapore Airlines. The duo had proposed an airline over a decade ago, but it failed to take off due to bureaucratic meddling. The government earlier this year liberalised foreign investment in the airline industry.
Tata Sons, holding company of the over-$100 billion Tata Group, has signed a memorandum of understanding with Singapore Airlines for the joint venture. It has moved the Foreign Investment Promotion Board, seeking approval to establish a new airline.
This is separate from the proposed AirAsia India airline in which the Tatas have 30 per cent equity stake. The new airline will compete with Jet Airways and Air India in the domestic sector and will be based out of New Delhi. Tata Sons will hold 51 per cent equity, while the balance will be owned by Singapore Airlines. There will be an initial investment of $100 million.
The board will, initially, have two nominees from Tata Sons.