Cyrus Mistry has given wings to Ratan Tata's long standing dream. The Tata Group will launch an airline in partnership with Singapore Airlines. The deal is staring at a lot of ‘regulatory unknowns'. Ajay Prasad, former civil aviation secretary says there may be a case of a conflict of interest as both airlines will operate in the Indian market. However, he also feels that Subramanian Swamy’s claims on violation of FDI rules in greenfield investment may not apply here.
Below is the edited transcript of his interview to CNBC-TV18.
Q: Do you see any regulatory challenges for the Tata-Singapore Airlines joint venture given the fact that the Tatas also hold a 30 percent stake in Air Asia India? Could that get in the way of an FIPB nod?
A: As far as the Civil Aviation policy is concerned on foreign direct investment, it permits any airline to come in with 49 percent equity as long as the Indian entities have a majority share. So, that conforms to this. There is suppose there is a likelihood of a conflict of interest because both airlines will be operating in the Indian market one as a low cost carrier and the other probably as a full service carrier. When they go the FIPB, some of these questions will have to clarified on how they intend to work out these arrangements. I am sure that they must have had some preliminary dialogue with Air Asia and with Singapore Airlines. They must be aware of this position and must have worked out some kind of a working arrangement the details of which we do not know as yet.
Read News In Full 20/09/13 CNBC-TV18/moneycontrol.com
No comments:
Post a Comment